US 'to free up millions of barrels of reserve oil'

US 'to free up millions of barrels of reserve oil' to combat petrol price rise
2 min read
23 November, 2021
Washington is attempting to organise similar moves from other states, making it uncertain when the US might reveal its plans.
Crude has soared in value of late [STR/NurPhoto/Getty]

The US is predicted to begin introducing millions of barrels of reserve oil onto the market within days to hold back rising petrol prices, sources said on Monday.

It is believed that between 30 to 35 million barrels of Strategic Petroleum Reserves oil will be gradually freed up, Politico reported.

Washington is attempting to organise similar moves from other states, such as Japan and China, making it uncertain when the US might reveal its plans, two sources said.

"I expect there will be a major move quite soon," an informed source explained.

If the predicted quantity of oil is introduced, this would equate to around three days of Washington's crude output.

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A Biden administration representative told Politico there is so far no determination on freeing up reserve oil.

"The conversations are ongoing and we are considering a range of tools for if and when action is needed."

Introducing reserve oil has been floated on several occasions by Jennifer Granholm, Joe Biden's energy secretary, as the commodity's elevated cost of late has sparked discontent in the US.

Washington has also encouraged the Organization of the Petroleum Exporting Countries (OPEC) and allies to increase their output in an attempt to push down the cost of crude, which is worsening inflation.

This month, OPEC said the cost of oil is possibly impeding the world's financial recovery, though it has yet to announce any intention to boost production.

An informed source indicated Washington was still considering whether it should introduce reserve oil.

The hope is that the suggestion may encourage Russia and OPEC to boost the quantity of oil available for international sale.

Though crude has recently dropped off, it reached $84 per barrel last month - its greatest value for seven years.

Analysts believe the uptick is due to many countries' recovery from Covid-19.