Reports that the Biden administration is planning another crude oil release from its strategic reserves have caused oil prices to drop by more than $5 a barrel today, offering mild relief to a market struggling with rising inflation.
The nation’s move could be echoed by allied nations from the International Energy Agency (IEA), in a bid to calm surging prices.
The release would mark the third such measure undertaken by the US since November last year, though it would be a significantly greater amount than previously seen; estimates say that the administration could put around 180 million barrels into circulation overall, or one million barrels a day over the course of several months.
A statement from the White House is expected this week on the matter, while the IEA is set to meet on Friday this week to discuss a synchronised oil release from its member states.
News of the Biden administration’s potential oil release also comes ahead of a meeting between the Organization of the Petroleum Exporting Countries and its allies to discuss potentially increasing output, though industry optimism on the result is not high, with the alliance typically reluctant to open its valves.
In the first three months of this year, oil prices have risen by almost 40%, an increase that was accelerated by Russia’s invasion of Ukraine and the subsequent sanctions brought against the former’s oil products. In response to the loss of Russian supplies, nations have been looking to boost domestic production and encourage greater output from other oil-rich nations, though neither measure offers immediate relief.
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In November last year, the US released 50 million barrels to ease rising prices in coordination with China, India, the UK, Japan, and South Korea. At the time, this was the first instance of the US tapping into its reserves for decades, as they are typically held for moments of war and natural disaster.