US President Joe Biden has announced the release of 15 million barrels of oil from the United States strategic reserve, a move that follows contentious OPEC+ production cuts that have drawn scorn in Washington in advance of next month’s midterm elections.
Biden said on Wednesday afternoon that the drawdown will complete the release of 180 million barrels that his administration approved in March amid global energy concerns linked to Russia’s war in Ukraine.
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The 15 million barrels are set to be delivered in December, the White House said earlier in the day.
“With my announcement today, we’re going to continue to stabilise markets and decrease the prices at a time when the actions of other countries have caused such volatility,” Biden told reporters during a news conference.
The release, which the administration initially called a “wartime bridge” as Washington and its allies barred Russian oil and gas imports over the invasion of Ukraine, has sent the US’s strategic reserve to its lowest level since 1984.
On Wednesday, about 400 million barrels remained in the reserve, a complex of four sites with deep underground storage caverns created in salt domes along the Texas and Louisiana Gulf coasts.
The White House has said the US government will restock the strategic reserve when oil prices are at or lower than $67 to $72 a barrel, while raising the possibility of additional releases during the US winter in an effort to keep prices down.
Biden on Wednesday again renewed criticism of oil companies, which his administration has accused of profiting from the worldwide energy supply crunch by keeping “pump prices higher than they should be”.
“My message to the American energy companies is this: you should not be using your profits to buy back stock or for dividends. Not now, not while a war is raging. You should be using these record-breaking profits to increase production and refining,” the president said.
The strategic reserve release continues what has been a pivot for Biden, who came into office promising to reduce the US’s reliance on fossil fuels and replace them with more renewable sources.
But he has, thus far, resisted pressure from the oil industry to open up more federal lands for drilling, approve pipeline construction and reverse raises on corporate taxes, as production has remained below pre-pandemic levels.
During Wednesday’s news conference, Biden called for an increase in US clean energy production, saying lawmakers needed to pass reforms to help alleviate roadblocks.
“Right now, the process of getting clean energy projects approved is too cumbersome and too time consuming,” he said. “So I’m asking the Congress, pass a permitting bill to speed up the approval of all kinds of energy production, from wind to solar to clean hydrogen.”
Meanwhile, high energy prices – particularly at the petrol pump – have left Biden’s Democratic Party reeling in the run-up to the November 8 midterm elections, which will decide the makeup of the US legislature and have vast implications for the president’s ability to enact his agenda.
In June, the price of petrol in the US averaged more than $5 a gallon ($1.32 per litre) for the first time, data from the American Automobile Association (AAA) showed. It is currently averaging about $3.87 a gallon ($1.02 per litre).
The situation has been worsened by the OPEC+ cuts announced in early October, with the White House saying Saudi Arabia – a key player in the alliance – would face “consequences” over the decision.
The cuts are projected to reduce the global output by two million barrels a day, or 2 percent of global supply.