To deal with high fuel prices at the pump, the United States will release oil from its national strategic oil reserves. President Biden announced that 50 million barrels of oil, nearly 8 billion liters, would hit the market in the coming months.
Biden says the extra crude oil is intended to tackle rising inflation and make petrol cheaper. Inflation in the United States rose to 6.2 percent in October, driven by the strongest rise in thirty years and higher energy prices.
“Americans suffer from higher gas prices on pump and home energy bills, just like companies,” Biden said. “This is a consequence of the fact that the world economy is recovering and there is not enough oil in the market.”
The White House says India, Japan, China, South Korea and the United Kingdom are attracting their strategic shares. These countries have significantly lower barrels of oil, for example India 5 million barrels and the United Kingdom 1.5 million barrels.
OPEC to increase production
The United States has already called for OPEC + to increase oil production, but the cartel of oil-producing nations, such as Saudi Arabia and Russia, is currently reluctant to do so. The current oil price of about $ 80 is a good price in OPEC’s view. Opec + has already stated that it intends to increase production to 400,000 barrels per day in December. In the eyes of the United States, it is not really enough and it is too late.
Oil companies actually borrow the reserve oil because the oil must then be repaid to the government with interest. Crude oil is sold directly to oil companies for refining
US Strategic Oil Reserve, The Strategic Petroleum Reserve, It contains approximately 600 million barrels of crude oil and is stored underground in the states of Texas and Louisiana. Strategic oil reserves were created during the oil crisis in the 1970s. The last war in Libya was in 2011 when it was used to raise oil prices.
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