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Biden planning to tap oil reserve to control gas prices

WASHINGTON (AP) – United States (US) President Joe Biden is preparing to order the release of up to one million barrels of oil per day from the nation’s strategic petroleum reserve, according to two people familiar with the decision, in a bid to control energy prices that have spiked as the US and allies have imposed steep sanctions on Russia over its invasion of Ukraine.

The announcement could come soon, when the White House said Biden is planning to deliver remarks on his administration’s plans to combat rising gas prices. The duration of the release hasn’t been finalised but could last for several months. The people spoke on the condition of anonymity to preview the decision.

High oil prices have not coaxed more production, creating a challenge for Biden. The president has seen his popularity sink as inflation reached a 40-year high in February and the cost of petroleum and gasoline climbed after Russia invaded Ukraine. Crude oil on Wednesday traded at nearly USD105 a barrel, up from about USD60 a year ago.

Still, oil producers have been more focussed on meeting the needs of investors, according to a survey released last week by the Dallas Federal Reserve. About 59 per cent of the executives surveyed said investor pressure to preserve “capital discipline” amid high prices was the reason they weren’t pumping more, while fewer than 10 per cent blamed government regulation.

The steady release from the reserves would be a meaningful sum and come near to closing the domestic production gap relative to February 2020, before the coronavirus caused a steep decline in oil output.

United States President Joe Biden speaking in the South Court Auditorium on the White House campus in Washington. PHOTO: AP