US to release 50 million barrels of oil to ease energy costs
WASHINGTON (AP) — President Joe Biden on Tuesday ordered 50 million barrels of oil released from America's strategic reserve to help bring down energy costs, in coordination with other major energy consuming nations, including China, India and the United Kingdom.
The move is aimed at global energy markets, but also at U.S. voters who are coping with higher inflation and rising prices ahead of Thanksgiving and winter holiday travel. Gasoline prices are at about $3.40 a gallon, more than 50% higher than a year ago, according to the American Automobile Association.
Administration officials said that reports of a possible release and consultations with other countries ahead of the announcement had caused oil prices to drop nearly 10% in anticipation of the news. The government will begin to move barrels into the market in mid to late December.
But the actions are unlikely to immediately bring down gas prices significantly as families begin traveling for the holidays. Administration officials noted that gasoline usually responds at a lag to changes in oil prices, and they suggested this is one of several steps in ultimately bringing down costs.
There was no discernable impact on the price for a benchmark barrel of U.S. crude right after the announcement. Prices have been up and down all month, and were up less than 1% so far in this holiday shortened week.
The actions by the U.S. and others risk counter moves by Gulf nations, especially Saudi Arabia, and by Russia. Saudi Arabia and other Gulf countries have made clear they intend to control supply to keep prices high for the time being.
As word spread in recent days of a coming joint release from U.S. and other countries’ reserves, there were warnings from OPEC interests that those countries may respond in turn, reneging on promises to increase supplies in coming...
