WASHINGTON: President Joe Biden was expected Thursday to announce the release of a record million barrels of oil a day from US strategic stockpiles in a dramatic attempt to cushion the political fallout from soaring crude prices due to Russia’s invasion of Ukraine. Multiple US media reports said Biden’s plan could see the US drawing from the Strategic Petroleum Reserve for as long as 180 days, dumping a significant amount of supply onto the overheated global oil market, which has sent inflationary shockwaves through the American economy.
Struggling with bad poll numbers and November’s looming midterm elections, when Republicans are forecast to take over Congress from the Democrats, the White House is scrambling to find a way to show Americans that Biden has a solution to a problem rooted in aftershocks from the COVID pandemic and President Vladimir Putin’s brutal war. A six month release of a million barrels daily would be by far the largest and most sustained ever tapping of the stockpiles in US history. The release would amount to augmenting global supplies by about one percent.
The White House press office declined to confirm the reports. However, Biden was scheduled to deliver a speech on “actions to reduce the impact of Putin’s price hike on energy prices and lower gas prices at the pump for American families.” Oil prices fell sharply on the reports, which came as the OPEC+ group of petroleum exporters decided to raise output only modestly despite the jump in crude prices in the wake of key energy supplier Russia’s decision to invade Ukraine.
The release would dwarf earlier uses of the strategic stockpile announced by the Biden administration in tandem with other countries on March 1 following the Russian invasion, and also last year in response to rising inflation. Despite a strongly rebounding economy and rapidly receding Covid-19 pandemic, Biden is getting little credit from voters, who instead blame him for rising prices everywhere from the supermarket to car dealerships.
Supply chain snags related to the different pace of economic recoveries around the world are part of the inflation phenomenon. Also underlying the politically perilous trend, however, are ever higher fuel costs, which in turn push up prices for transport of almost all goods. And for US motorists, the price shock as they fill cars in gasoline stations is a constant irritation. “I did this,” reads a sticker featuring a picture of Biden that has been fixed next to pump handles in many stations.
Gasoline prices currently stand at an average of $4.23 a gallon, up 47 percent from their level a year ago. The price of US benchmark West Texas Intermediate was down 4.6 percent to $102.89 a barrel, while Brent oil futures were down 5.5 percent at $107.20 a barrel. Oil prices surged close to $140 a barrel in March on worries about lost Russia crude supply as some “self sanctioning” oil buyers shunned Russian crude in the wake of international sanctions on Moscow. Prices have retreated somewhat since the United States banned Russian energy imports on March 8, but have lingered above $100 a barrel most of the subsequent period. – AFP