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Biden to release 50m barrels of oil in effort to bring down rising US gas prices

The White House on Tuesday said it had ordered 50m barrels of oil released from the strategic reserve to bring down energy costs, in coordination with countries including China.

In a tweet, Joe Biden said: “I have been working with countries across the world to address the lack of supply. As a result of our diplomatic efforts, this step will be taken in parallel with other major energy consuming nations including China, India, Japan, Republic of Korea and the United Kingdom.”

The move is an effort to bring down rising gas prices. US gasoline prices are averaging about $3.40 a gallon, more than double their price a year ago, according to the American Automobile Association.

The Strategic Petroleum Reserve is an emergency stockpile to preserve access to oil in case of natural disasters, national security issues and other events.

Maintained by the US energy department, the reserves are stored in caverns in salt domes along the Texas and Louisiana Gulf coasts. There are roughly 605m barrels of sweet and sour petroleum in the reserve.

The Biden administration has argued that the supply of oil has not kept pace with demand as the global economy emerged from the coronavirus pandemic, and the reserve is the right tool to help ease the problem.

The president was due to speak on the subject before leaving Washington for Nantucket on Monday afternoon, remarks the White House said would focus on “the economy and lowering prices for the American people”.

In a statement, former president Donald Trump claimed credit for filling the reserve and opposed Biden’s move.

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“Those reserves are meant to be used for serious emergencies, like war, and nothing else,” he said.

The Biden administration’s decision comes after weeks of diplomatic negotiations and the release will be taken in parallel with nations including, India, Japan, the Republic of Korea and the UK, major energy consumers.

The US Department of Energy will make the oil available in two ways: 32m barrels will be released in the next few months and will return to the reserve in the years ahead, the White House said. Another 18m barrels will be part of a sale of oil that Congress had previously authorized.

The White House press secretary, Jen Psaki, said on Monday evening the White House would keep tabs on oil companies too.

“We will continue to press oil companies who have made record profits and are overseeing what we consider to be price gouging out there when there’s a supply of oil or the price of oil is coming down and the price of gas is not coming down,” Psaki said.

“It does not take an economic expert to know that’s a problem.”


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