U.S. President Joe Biden will likely release additional oil from the Strategic Petroleum Reserve, or SPR, this week, less than three weeks from the midterm polls scheduled for Nov. 8.
What Happened: The Biden administration is set to announce this week the sale of the last tranche of 14 million barrels from the 180-million-barrel program the president previously announced, Reuters reported, citing sources.
This, according to the report, will likely mark the largest-ever release from the SPR that started in May.
The government has also approached oil companies regarding the sale of an additional 26 million barrels from a “congressionally mandated” sale in 2023 fiscal that began on Oct. 1, Reuters said, citing a separate source.
A Bloomberg report noted that Energy Department and White House officials have been meeting with executives of oil companies, including Exxon Mobil Corp. XOM and ConocoPhillips COP, regarding temporary export control in a bid to boost domestic supply.
The Department of Energy will reportedly announce further details on eventually replenishing the reserve.
SPR is a stockpile of petroleum maintained by the U.S. Department of Energy meant to be used during emergencies. The reserve, boasting a capacity of 714 million barrels, is stored in underground tanks in Louisiana and Texas.
Why It’s Important: Oil prices breached $130-a-barrel in early March in the aftermath of the Russia-Ukraine war only to thaw down below $100 in late April. The black gold rebounded above the mark and peaked at $123.68 in mid-June but has been trending lower since then amid the government’s efforts to boost domestic supply.
Higher petroleum prices would mean higher gasoline prices, which directly feed into inflation. The current economic weakness and market downturn have been blamed primarily on the rate hikes the Federal Reserve has implemented in the current tightening cycle to rein in inflation.
At a campaign rally in September, former President Donald Trump called out his successor for artificially keeping gasoline prices in check, with an eye on elections, by drawing from the SPR, which, he said, was meant to be used in times of war.
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