US to release 15 million barrels of oil from strategic reserve
US President Joe Biden will announce the release of 15 million barrels of oil from the US Strategic Petroleum Reserve on Wednesday.
This comes just weeks after OPEC+ announced to cut oil production by two million barrels a day, which prompted US lawmakers to slam the cuts and threaten to withdraw military support for Saudi Arabia.
The additional 15 million barrels will be released sometime in December. The draw completes the plan announced in March to release a total of 180 million barrels - an initiative that was supposed to occur every six months, the Associated Press reported.
The US government will also be restocking the strategic reserve when oil prices are at or lower than $67 to $72 a barrel, the AP reported.
"The profits that energy refinery companies are now capturing on every gallon of gas is about double what it typically is at this time of year, and weak seller margins over the refinery price are more than 40 percent of that fiscal level," a senior administration official told reporters on Tuesday.
"Outside industry profit margins compared to normal are adding more than 60 cents to the average price of a gallon of gas and have kept pump prices higher than they should be including as oil prices have come down."
The decision comes just months after Biden made a controversial trip to Saudi Arabia, cast in part as an effort to revive frayed ties with Riyadh and mitigate the effect of skyrocketing energy prices for US consumers.
The visit was heavily criticised by Democrats, as well as by Saudi activists, who saw the move as ignoring the kingdom's human rights abuses in a bid to get Saudi assurances on cheaper energy.
Shortly after meeting with Saudi Arabia’s de facto ruler, Crown Prince Mohammed Bin Salman, Biden said he expected the kingdom to take “further steps” to increase the supply of oil in the “coming weeks”.
Earlier this month, a bill was introduced by Tom Malinowski, Sean Casten and Susan Wild, and was in direct response to Opec+'s decision to issue a major cut in oil production, which market analysts say will force the price of oil to rise to above $100 a barrel again.
They also accused Saudi Arabia of siding with Russia to raise prices amid signs that the global economy is slowing.
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