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U.S. to release oil from reserves in coordination with other countries to lower gas prices

President Joe Biden said Tuesday that the administration will tap the Strategic Petroleum Reserve as part of a global effort by energy-consuming nations to calm 2021′s rapid rise in fuel prices.

The coordinated release between the U.S., India, China, Japan, Republic of Korea and the United Kingdom is the first such move of its kind.

The U.S. will release 50 million barrels from the SPR. Of that total, 32 million barrels will be an exchange over the next several months, while 18 million barrels will be an acceleration of a previously authorized sale.

U.S. oil dipped 1.9% to a session low of $75.30 per barrel following the announcement, before recovering those losses and moving into positive territory. The contract last traded 2.5% higher at $78.67 per barrel. International benchmark Brent crude stood at $82.31 per barrel, for a gain of 3.2%.

 

U.S. marshals other nations, challenges OPEC+ with release of oil reserves

The administration of U.S. President Joe Biden announced on Tuesday it will release millions of barrels of oil from strategic reserves in coordination with China, India, South Korea, Japan and Britain, to try to cool prices after OPEC+ producers repeatedly ignored calls for more crude.

Biden, facing low approval ratings amid rising inflation ahead of next year's congressional elections, has grown frustrated at repeatedly asking the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, to pump more oil without any response.

Crude oil prices recently touched seven-year highs, and consumers are feeling the pain of the increase in fuel costs. Retail gasoline prices are up more than 60% in the last year, the fastest rate of increase since 2000, largely because people have returned to the roads as pandemic-induced restrictions have eased and demand has rebounded.

Under the plan, the United States will release 50 million barrels, the equivalent of about two and a half days of U.S. demand. India, meanwhile, said it would release 5 million barrels, while Britain said it would allow the voluntary release of 1.5 million barrels of oil from privately held reserves.

Details on the amount and timing of the release of oil from South Korea, Japan and China were not announced. Seoul said it would decide after discussions with the United States and other allies. read more And Japanese media said Tokyo would detail its plans on Wednesday.