Page 4 - NorthAmOil Week 13 2022

NorthAmOil COMMENTARY NorthAmOil

Biden announces largest

SPR release yet

US President Joe Biden has announced the largest ever release

of crude from the country’s Strategic Petroleum Reserve in a

bid to lower oil prices

US US President Joe Biden announced on March the market and leaving the US more vulnera-
31 that he had authorised the largest ever release ble to further supply disruptions. In addition,
WHAT: of oil from the country’s Strategic Petroleum releasing this much crude over a six-month
US President Joe Biden Reserve (SPR). Under the new plan, the US period will involve overcoming various logisti-
has unveiled plans for the will release 1mn barrels per day (bpd) of crude cal challenges.
largest ever release of from the SPR each day over a six-month period
SPR crude. starting in May, for an “unprecedented” total of Under pressure
around 180mn barrels. Biden has authorised two previous releases from
WHY: The move comes as Biden tries to bring down the SPR since November 2021 in an effort to curb
The release has been crude and gasoline prices ahead of mid-term oil price increases. These moves were co-or-
authorised in a bid to elections in November that could see his Dem- dinated with a number of other countries that
lower crude prices ahead ocrat Party lose its majority in US Congress. It also opted to tap their strategic reserves. The last
of the US mid-term also follows a decision by the OPEC+ group of US-led release was co-ordinated via the Inter-
elections, against the oil producers not to accelerate output increases, national Energy Agency (IEA) and unveiled on
backdrop of the war in despite being called on to do so by Biden and March 1, days after Russia launched its invasion
Ukraine. other Western politicians, including UK Prime of Ukraine.
Minister Boris Johnson. Instead, OPEC+, which However, the impact of that release and the
WHAT NEXT: includes Russia, opted to stick to its previous US’ previous one, announced in November,
There are warnings plan of gradual production hikes. has been limited. Indeed, crude prices dropped
that the release will be All of this is playing out against the backdrop more dramatically in November on the emer-
logistically challenging of Russia’s war in Ukraine, which continues to gence of the Omicron variant of the coronavirus
and that it could fail to keep oil and gas prices elevated amid fears of (COVID-19) than they did as a result of that first
have its intended impact. potential major disruption to supplies heading SPR release. That release also marked the first
for Europe. And there have been warnings that time the SPR had been tapped to control prices.
the release could backfire, triggering panic in Despite the limited success of the previous

US President Joe Biden
also called on US oil
companies to produce
more crude.

P4 www. NEWSBASE .com Week 13 31•March•2022