The U.S. Releases Oil Reserves to Ease Oil Prices

The White House released on March 31st that President Biden had ordered the release of 1 million barrels of oil from the Strategic Petroleum Reserve, abbreviated as, SPR, every day for six months, totaling 180 million barrels. It also asked companies to drill more to lower oil prices that soared as the United States and allies sanctioned Russia for invading Ukraine.

The amount of oil reserves released is unprecedented, and the world has never released oil reserves at a rate of 1 million barrels per day. The equivalent of two days of global oil demand is also the third time that the United States has used the SPR in the past six months.

According to the report, the United States, the European Union and other countries sanctioned Russia for its invasion into Ukraine and stopped buying Russian oil, while demanding OPEC to increase production and quickly replenish its oil reserve to avoid dependence on Russia. But OPEC insists on gradually increasing oil production in accordance with existing agreements.

The American Petroleum Institute said the introduction of SPR could alleviate some pain of the near-term oil supply, but it is not a long-term solution. Biden called on U.S. oil companies to increase drilling and boosting electric cars and batteries production. President Biden will also call on Congress to pass legislation penalizing oil and gas companies that lease publicly owned land without producing energy.