President Joe Biden is reportedly preparing for what would be the largest ever spill of crude oil from the Strategic Petroleum Reserve, totaling some 180 million barrels, according to unnamed sources. cited by Reuters.
According to the APwho also spoke to two sources wishing to remain anonymous, the White House was preparing to release up to 1 million barrels of crude per day to rein in retail fuel prices.
The exact timing of the release has yet to be agreed, but it could take a few months, the AP source said.
Gasoline prices soared above $4 a gallon in most of the United States, hitting a new high of over $6 a gallon in Los Angeles earlier this month. President Biden recently blame the gas price hike on Russian President Putin, calling it “Putin’s price hike”, although prices were rising at US gas stations long before the war began in Ukraine.
In fact, the first time this White House resorted to an SPR publication was last November, when the White House announced it would sell or lease 50 million barrels of oil from the Strategic Petroleum Reserve to try to relieve the pain at the pump.
At the time, analysts warned that the release of the SPR would not have the desired effect for various reasons, such as the type of crude to be released versus the types of crude used by refiners to produce fuels. Also, they said, traders had already set the price in the release, and this would not affect the benchmark oil prices on which fuel prices are based.
Those analysts turned out to be right, but the feds pushed ahead with their release, which in January totaled some 40 million barrels without affecting oil or gasoline price movements too much.
A more recent announcement by the International Energy Agency about the release of 60 million barrels from national oil reserves also failed to have the expected effect on prices, suggesting that such releases may not to be the measure that works in a tight supply environment made more tight by the West. sanctions against Russia.
By Irina Slav for Oilprice.com
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