By Lalit K Jha
(Eds: Updating with more inputs)
Washington, Nov 23 (PTI) US President Joe Biden on Tuesday announced the release of 50 million barrels of oil from the country's Strategic Petroleum Reserve to lower energy costs for Americans, a decision taken in coordination with other major economies, including India, Japan and China.
Biden has been working with countries across the world to address the lack of supply as the world exits the pandemic, the White House said.
“Today, the President is announcing that the Department of Energy will make available releases of 50 million barrels of oil from the Strategic Petroleum Reserve to lower prices for Americans and address the mismatch between demand exiting the pandemic and supply,” the White House said.
“And, as a result of President Biden’s leadership and our diplomatic efforts, this release will be taken in parallel with other major energy consuming nations including China, India, Japan, Republic of Korea and the United Kingdom,” said the White House.
“This culminates weeks of consultations with countries around the world, and we are already seeing the effect of this work on oil prices. Over the last several weeks as reports of this work became public, oil prices are down nearly 10 per cent,” it said.
Gas prices are at about USD 3.40 a gallon (3.785 litres), more than 50% higher than their price a year ago, an Associated Press report quoted the American Automobile Association.
India will release 5 million barrels of crude oil from its emergency stockpile in tandem with the US, China, Japan, and other major economies to cool international oil prices, the government announced in New Delhi on Tuesday.
This is the first time ever that India, which stores 5.33 million tonnes or about 38 million barrels of crude oil in underground caverns at three locations on the east and west coast, is releasing stocks for such purposes.
Of this, about 5 million barrels will be released.
"India strongly believes that the pricing of liquid hydrocarbons should be reasonable, responsible and be determined by market forces," a government statement said.
"India has repeatedly expressed concern at the supply of oil being artificially adjusted below demand levels by oil-producing countries, leading to rising prices and negative attendant consequences."
While the statement did not give the date for release, an official privy to the matter said the stock could be released as early as 7-10 days.
Soon after President Biden's announcement, Secretary of Energy Jennifer M. Granholm authorised that 50 million barrels of crude oil from the U.S. Department of Energy’s (DOE) Strategic Petroleum Reserve (SPR) be made available.
As the global economy recovers from the pandemic, oil supply has failed to increase at a pace necessary to meet demand, the US energy department said.
“Today’s decision is in response to the highest oil prices experienced in seven years and aims to ensure adequate supply as we exit the pandemic. For the first time, as the result of the President’s leadership, today’s announcement is in parallel with other major energy consuming nations including China, India, Japan, South Korea, and the United Kingdom,” it said.
“As we come out of an unprecedented global economic shutdown, oil supply has not kept up with demand, forcing working families and businesses to pay the price,” said Granholm.
“This action underscores the President’s commitment to using the tools available to bring down costs for working families and to continue our economic recovery,” he added.
The SPR is the world's largest supply of emergency crude oil, and the federally owned oil stocks are stored in underground salt caverns at four storage sites in Texas and Louisiana. It is a critical tool that has a long history of protecting the economy and American livelihoods in times of economic challenge, the Department of Energy said. PTI LKJ RS AKJ RS