The United States Government, under President Joe Biden, says it will release millions of barrels of oil from strategic reserves, in coordination with China, India, South Korea, Japan and Britain, as a counter measure against asking the Organization of the Petroleum Exporting Countries (OPEC)’s production cuts and rising prices after the cartel refused to increase supply.
Reuters report that, President Biden, facing low approval ratings amid rising inflation ahead of next year’s congressional elections, has grown frustrated at repeatedly asking its allies, also known as OPEC+, to pump more oil without any response.
“I told you before that we’re going to take action on these problems. That’s exactly what we’re doing.. It will take time, but before long you should see the price of gas drop where you fill up your tank, and in the longer-term we will reduce our reliance on oil as we shift to clean energy,” Biden said in remarks broadcast from the White House.
Crude oil prices recently touched seven-year highs, and consumers are feeling the pain of the increase in fuel costs. Retail gasoline prices are up more than 60% in the last year, the fastest rate of increase since 2000, largely because people have returned to the roads as pandemic-induced restrictions have eased and demand has rebounded.
Under the plan, the United States will release 50 million barrels, the equivalent of about two and a half days of U.S. demand. India, meanwhile, said it would release 5 million barrels, while Britain said it would allow the voluntary release of 1.5 million barrels of oil from privately held reserves.
Details on the amount and timing of the release of oil from South Korea, Japan and China were not announced. Seoul said it would decide after discussions with the United States and other allies and Japanese media said Tokyo would detail its plans on Wednesday.
OPEC+, which includes Saudi Arabia and other U.S. allies in the Gulf, as well as Russia, has rebuffed requests to pump more at its monthly meetings. It meets again on Dec. 2 to discuss policy but has so far shown no indication it will back down.
The group has been struggling to meet existing targets under its agreement to gradually increase production by 400,000 barrels per day (bpd) each month – a pace Washington sees as too slow.