Joe Biden is set to announce the largest-ever release of US oil reserves

US President Joe Biden is set to announce the largest-ever release of oil from the country’s emergency stocks, three people familiar with the plan said, as he ramps up efforts to cool crude prices fueled by high inflation across the economy.

The White House is expected on Thursday to announce the release of 180 million barrels of Strategic Petroleum Reserve, dwarfing the volume of previous emergency releases, and also seeking cooperation from other Western countries to release some of their stored oil.

People familiar with the plan said the latest release, the third such move by Biden since November, would last several months and amount to 1 million barrels of oil per day.

The United States consumes about 20 million barrels per day, which is about a fifth of global demand.

The US government will later buy back oil to replenish reserves at $80 a barrel, according to a person familiar with the plan, in a move aimed at encouraging more exploration from US shale oil companies.

The government is trying to plug the scarcity of supply so that US production begins to pick up later this year, according to a person familiar with the plan.

Oil prices fell after reports of Biden’s impending announcement, with US West Texas Intermediate crude down 4.2 percent to $103.29 and international benchmark Brent crude down 4.4 percent to $108.50.

Biden is scheduled to speak Thursday at 1.30 p.m. about his administration’s “measures to limit the impact of… [Vladimir] Putin is raising energy prices and lowering gas prices at the pumps for American families,” according to the White House schedule.

Since Moscow’s invasion of Ukraine, Biden has increasingly blamed the Russian president for high inflation Damage his consent ratings and damage the Democratic Party’s chances of retaining control of Congress in the November midterm elections.

The White House’s move also comes as Western countries reinforce sanctions against Russia, the world’s largest oil exporter, including a Ban by the United States on oil imports from the country in the wake of Moscow’s war in Ukraine.

The International Energy Agency, the watchdog for Western consuming nations, said this month that sanctions against Russia and the reluctance of shippers to load Russian crude could cut the country’s production by as much as 3 million barrels per day, or about 3 percent of the global total. by April.

It would not be surprising that the administration extended [earlier stock releases] “Given the significant risks of disruption to Russian oil supplies, it’s not going away,” said Bob McNally, an adviser to former US President George W. Bush who now heads consulting firm Rapidan Energy Group.

Oil prices have risen since the invasion, with international benchmark Brent crude falling Highest level in 14 years This month. the prices almost doubled Last year, while average gasoline prices rose 50 percent and set records in recent weeks.

The United States has also urged Saudi Arabia and other members of OPEC to increase the pace of oversupply, but the organization has done so Resist the pressure to do this.

The group of oil producers and allied countries on Thursday He said They will aim to increase production by 432,000 barrels per day in May, while continuing with the monthly plan agreed last year to replace volumes that were gradually reduced at the start of the pandemic.

“The current volatility is not due to fundamental factors but to ongoing geopolitical developments,” OPEC said.

The Strategic Petroleum Reserve is a government-run emergency storage complex consisting of four underground sites in salt domes along the US Gulf Coast. It currently holds 568 million barrels of crude oil, according to the Federal Energy Information Administration.

Biden announced his release from SPR in November, and last month the United States joined other members of the International Energy Agency in Coordinated global edition.

Previous large releases of stocks occurred after supply disruptions such as Hurricane Katrina in 2005 and the Libyan civil war in 2011.

The Energy Department declined to comment.

Additional reporting by Miles McCormick in New York and Tom Wilson in London