In an effort to lower skyrocketing petrol costs, Joe Biden intends to release up to 15 million barrels of oil from the US’s emergency oil reserves.
The 180 million barrels of oil discharge would be the most recent installment of an agreement Biden reached with petroleum corporations last spring.
According to Bloomberg, his administration intends to make the most recent reserve release public later this week.
Last week, Biden said that gas prices are out of control and that he will have more to say about bringing them down this week.
Additionally, the government may use the Strategic Petroleum Reserve (SPR) in the next weeks and months as needed to stabilize oil, according to David Turk, the president’s deputy energy secretary, who made the announcement last week.
Just weeks out from the crucial midterm elections, news of the initiative to restrain gasoline prices will put Biden’s support to the test.
According to a person familiar with White House discussions, Biden wanted to lower petrol costs before the November elections.
The unidentified insider said that the government had a little window before the midterm elections to attempt to cut gasoline costs or at least show that they were making an effort.
They continued, saying, “The White House does not like $4 per gallon gas and it has indicated that it would take steps to prevent it from happening again.”
According to the AAA automotive club, the national average price of gasoline in the US reached $3.89 per gallon on Monday, up nearly 20 cents from one month before and 56 cents from this time last year.
In June, the average price of gas surpassed $5.00 for the first time.
The Department of Energy said in May of last year that bids for a buyback of about one-third of the 180 million barrel sale will be accepted late this year.
It implied at the time that deliveries would be related to falling oil prices and declining demand, most likely after the end of the fiscal year 2023 on September 30 of the following year. The buy-backs may continue until 2025, according to two sources.
In recent months, Biden officials have also pushed oil refiners, including Exxon Mobil, Chevron, and Valero, to refrain from increasing gasoline exports and have threatened to take action if facilities do not raise stockpiles.
The government hasn’t ruled out a prospective restriction on the export of gasoline and diesel, despite claims from those opposed to such a measure that it would worsen Europe’s energy crisis and drive up domestic fuel costs.
Additionally, a legislation established by Congress years ago requires the government to sell an additional 26 million barrels of SPR oil in the fiscal year 2023, which began on October 1.
News of the president’s most recent oil intentions broke when he said that he would “reassess” the US’s partnership with the oil-rich Saudis in light of their backing for Russia. This announcement came just before the midterm elections, and it was certain to drive up gas prices.
After Biden warned that there will be “consequences” for OPEC lowering oil output, the cousin of Saudi Arabia’s Crown Prince Mohammed bin Salman made a deadly warning against anyone who “challenge” the country.
Saud al-Shaalan is heard declaring in a video that “anyone who questions the existence of our kingdom, we are all projects of jihad and death” in a warning directed at “the West.” anybody who believes they can harm us.
Al-warning Shaalan’s comes amid very high tensions between Washington and Riyadh after the two million barrel per day reduction in oil output by OPEC+ and accusations from the Biden administration that the Saudi Kingdom is siding with Russia and Putin.
As officials stated that the US will be reevaluating its ties with the Saudis, Biden said Riyadh would suffer “consequences.”
In an interview with CNN that aired last Tuesday, Biden stated, “There’s going to be some penalties for what they’ve done with Russia.”
I won’t get into what I’d think about and what I have in mind, he said. But there will be repercussions, they will come.
The Kingdom then responded with a shocking revelation that the Biden administration had asked for the OPEC output reduction to be postponed until after the November elections.
Before millions of Americans go to the polls, the White House is reportedly preparing for a further increase in petrol prices.
Russia is the nation that gains the most from the 2 million barrel reduction, according to John Kirby, the White House’s national security spokesperson, in a teleconference with reporters on Friday.
According to Kirby, the reduction “allows [Putin] to continue funding his war-making machine and it clearly gives him, Mr. Putin, a level of comfort here.”
The Saudi foreign minister argued that such a charge is meant to “distort the facts” and that Saudi Arabia has adopted a “principled approach” with regard to the conflict between Russia and Ukraine.
In July, Biden personally met with the crown prince to discuss energy production. The meeting was contentious and started with a fist bump rather than a handshake.
In a statement, bin Farhan Al Saud said that “the Government of the Kingdom of Saudi Arabia would like to express its entire rejection of these assertions that are not founded on facts and which are based on misrepresenting the OPEC+ decision out of its strictly economic context.”
The foreign minister said that Saudi Arabia opposes “any infringement on nations’ sovereignty over their lands” and that Saudi Arabia supports UN resolutions pertaining to the conflict.
The Government of the Kingdom made clarifications via ongoing discussions with the U.S. According to what has been proposed, delaying the OPEC+ decision for a month would have had significant economic repercussions, according to all economic evaluations,’ bin Farhan Al Saud stated.
Kirby, however, said that Riyadh was given information by Washington demonstrating that there was “no market foundation” for production cutbacks and that they “could simply wait until the next OPEC meeting and see how things evolved.”
Other OPEC countries told us in private that they felt pressured to follow Saudi Arabia’s lead.
In a news conference, Kirby said that Saudi Arabia had been “twisting arms” in order to persuade other countries to accept the reduction, and that “more than one” had previously voiced reservations about doing so.