The US will release part of its oil reserves to make crude oil cheaper and reduce pressure on homes and businesses | Economy

Illuminated panel with fuel prices, on November 11 at a gas station in Brooklyn (New York).
Illuminated panel with fuel prices, on November 11 at a gas station in Brooklyn (New York).ANDREW KELLY (Reuters)

The president of the United States, Joe Biden, announced on Tuesday that the Department of Energy will release 50 million barrels of oil from the Strategic Petroleum Reserve of the world’s leading power in order to reduce prices and address the mismatch between demand. and the offer. It is a coordinated movement with other major oil consumers such as China, Japan, the United Kingdom or South Korea.

More than half, 32 million barrels, will be available during the next few months through the exchange mechanism, thus releasing a volume of oil that will eventually return to the Strategic Petroleum Reserve in the next few years automatically. The rest of the barrels will be put into circulation in an accelerated way in the coming months as part of a sale that the US Congress had previously authorized.

As reported by the White House, the measure will be taken in parallel with other major nations that also consume large amounts of energy, such as China, India, Japan, South Korea and the United Kingdom. The pact ends weeks of consultations with countries around the world, which has resulted in a drop in prices of almost 10% since reports began to be made public in recent weeks.

“The President is willing to take additional steps, if necessary, and is willing to use all of his powers working in coordination with the rest of the world to maintain an adequate supply as we emerge from the pandemic,” the White House said in a statement, underscoring that the announcement reflects the president’s commitment to do everything in his power to reduce costs to the American people and continue the strong economic recovery.

ÔÇťAmerican consumers are feeling the impact of high gasoline prices on the pump and on their home heating bills, and so are businesses because the oil supply has not kept up with demand at as the global economy emerges from the pandemic. That is why President Biden is using all the tools available to work to reduce prices and address the lack of supply, “explains the White House in the note published on Tuesday.

Nonetheless, the Administration emphasizes its commitment to the president’s ambitious clean energy goals, as reflected in two regulations (the Bipartisan Infrastructure and the Better Rebuild Act) that, it stresses, represent the largest investment in the fight against change. climate in U.S. history, and are a critical step toward achieving a net-zero emissions economy by 2050 and reducing dependence on foreign fossil fuels.

This Monday, after the announcement that Jerome Powell has been appointed for a new term at the head of the Federal Reserve, the White House reported that, if he achieves the approval of the Senate, the central banker will make the fight against climate change one of your management priorities.

Anti-competitive practices

On the other hand, and despite the presidential effort to address oil supply imbalances, the White House position also focuses on how consolidation in the oil and gas sector can result in anti-competitive practices that prevent consumers from Americans benefit from falling oil prices.

“There is growing evidence that falling oil prices do not translate into lower prices at the pump,” says the US Administration, recalling that last week, Biden asked the Federal Trade Commission to examine what is happening in the oil and gas markets. At the same time, it prohibited prospecting and extraction in two natural areas linked to indigenous populations in the country.

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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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