TheCable

The United States says it will release 50 million barrels of oil from reserves to lower energy costs amid a spike in gasoline prices and soaring inflation.

The White House announced this in a statement on Tuesday.

This development follows repeated calls of Joe Biden-led US government to the Organisation of the Petroleum Exporting Countries and its allies, known as OPEC+, to pump more oil in hopes it would lower gas prices.

But the oil cartel declined to ramp up production, sticking to its plan to increase the global oil supply by 400,000 barrels per day till December.

Last week, Biden asked the federal trade commission (FTC) to investigate what he described as “anti-consumer” behavior by oil and gas companies and whether it could have led to increased gas prices.

Gasoline prices are at about $3.40 a gallon, more than 50% higher than a year ago, according to the American Automobile Association.

According to the statement, 32 million barrels will be released from the Strategic Petroleum Reserve over the next several months and will be replaced in the years ahead.

An additional 18 million barrels that Congress authorised for sale will be released in the coming months.

The US said the release will be in coordination with several other countries, including China, India, Japan, the Republic of Korea, and the United Kingdom.

“American consumers are feeling the impact of elevated gas prices at the pump and in their home heating bills, and American businesses are, too, because oil supply has not kept up with demand as the global economy emerges from the pandemic,” the statement reads.

“That’s why President Biden is using every tool available to him to work to lower prices and address the lack of supply.”

Officials believe that the coordinated effort could potentially have more of an effect on lowering gas prices.

They said it was the first time that the United States had coordinated such a move with some of the world’s largest oil consumers.

“The President stands ready to take additional action, if needed, and is prepared to use his full authorities working in coordination with the rest of the world to maintain adequate supply as we exit the pandemic,” the statement adds.

“Even as the President is helping to lead the world in addressing oil supply imbalances, he is also focused on how consolidation in the oil and gas sector may be resulting in anti-competitive practices that keep American consumers from benefitting when oil prices fall.”