According to the White House, President Joe Biden is proposing a historic release of oil from US reserves, as well as efforts to penalize oil firms for failing to increase output from underused leases on federal land.
The measures are intended to lower gas costs while also putting pressure on oil firms to expand supply. The bold move, which Biden was expected to launch from the White House later Thursday, addresses a major political challenge months before the November elections.
"The President will declare the biggest transfer of oil reserves in record, placing one million additional barrels on the street on average – each day – for the next six months," the White House said. "The volume of this production is unparalleled: the globe has never seen an oil reserve release at this rate of one million barrels per day for this long." This unprecedented release will give a historic level of production to serve as a bridge until domestic production rises up at the end of the year."
A total of 180 million barrels of crude oil would be released. Officials from the White House claimed it would serve as a "bridge" when US and worldwide oil production resumes following the coronavirus outbreak. Officials declined to disclose whether other nations were also transferring barrels from their stocks. The move was made in conjunction with US partners overseas, notably in Europe.
Officials, however, refused to speculate on how quickly gas prices may fall as an outcome of the announcement. They also stated that they would not be concerned with "urgent short-term price swings" in the oil sector. Instead, they stated that their purpose was to alleviate a supply shortage caused by Russian oil exiting the industry, adding that this would benefit American consumers.
This is huge as after a really long time US has tapped its reserves. Can this be a start of another cold war?
ReplyDeleteWhile I think that releasing oil reserves into the economy is a good way to counter high prices, I believe that we need a better long term solution so American's are not spending high amounts. I also think that once the war in Ukraine settles, prices will start to return to normal as their is less uncertainty in the market.
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