Status: 10/19/2022 03:22 am
In view of the Opec+ plans for a massive cut in production, the USA want to go back to their strategic reserves. President Biden probably also has the upcoming midterm elections in mind.
A few weeks before the midterm elections in the USA, President Joe Biden wants to tap into the strategic oil reserves again and thus ensure relief at the pumps.
Biden wants to announce the release of 15 million barrels of oil for sale today, according to government sources. For the coming winter he will also hold out the prospect of further oil sales in order to depress prices.
Response to Saudi Arabia’s announcement
White House officials had previously said the tapping of the strategic reserve was in response to the recent announcement by Saudi Arabia-dominated oil alliance Opec+ that it would cut oil production by two million barrels a day (159 liters each) from November.
The shortage in supply is intended to drive up the price of oil, which in turn benefits Moscow from the US perspective, which can use the proceeds to continue financing the war of aggression against Ukraine.
Rising prices at the pumps could also become a political burden for Biden and his Democrats shortly before the US midterm elections. Against this background, Biden recently stated that there would be consequences for Saudi Arabia.
Reserves now at lowest level since 1984
According to several White House officials, US strategic reserves currently total nearly 400 million barrels of oil. As recently as March, Biden released 180 million barrels over a six-month period, and reserves are now at their lowest level since 1984.
In his speech on Wednesday, Biden will also say that the government will replenish strategic oil reserves if oil prices are at or below the $67-$72 a barrel range. This would ensure an increase in domestic production by ensuring that demand would remain at a base level even if prices fell. In the morning, a barrel (159 liters) of North Sea Brent cost $92.31.