PriceSensitive

US to release record amount from emergency oil reserve

Economy
01 April 2022 17:18 (AEDT)

The Bryan Mound Strategic Petroleum Reserve in Texas. Source: Reuters

US President Joe Biden has launched a record release from the US emergency oil reserve in attempt to battle rising fuel prices.

From May, one million barrels per day of crude oil will be released for six months from the Strategic Petroleum Reserve.

The release will more than cover the recent ban on Russian oil within the country and is expected to lower fuel prices.

The President has been liaising with allies in the International Energy Agency to coordinate further releases.

US crude oil prices have plummeted 7 per cent on the announcement.

In other attempts to confront the fuel shortage, Biden has encouraged oil companies to ramp up drilling.

He called on Congress to introduce a fee for companies sitting on thousands of unused oil and gas leases on public lands.

Oil companies often have a deep inventory of permits to prepare for future activities, but logistical constraints can make it hard to use them.

Biden also hopes to accelerate manufacturing of electric vehicles and batteries.

To support this, he invoked the Defense Protection Act, which will support the production of materials used in electric vehicles.

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