High oil prices have not led to more production, posing a challenge for Biden. The president saw his popularity plummet as inflation hit a 40-year high in February and the cost of petroleum and gasoline rose after Russia invaded Ukraine. Crude oil traded at nearly $105 a barrel on Wednesday, up from about $60 a year ago.
Still, oil producers are more focused on meeting investor needs, according to a survey released last week by the Dallas Federal Reserve. About 59% of executives surveyed said investor pressure to maintain “capital discipline” amid high prices was the reason they stopped pumping, while less than 10% blamed government regulation.
The steady release from reserves would be a significant amount and close to closing the domestic production gap from February 2020, before the coronavirus caused a sharp drop in oil production.
The Biden administration announced in November the release of 50 million barrels from the strategic reserve, in consultation with other countries. And after the war in Ukraine started, the US and 30 other countries agreed to release an additional 60 million barrels from reserves, half of which came from the US.
More than 568 million barrels of oil were held in reserve as of March 25, according to the Department of Energy, which manages it.
The news about the government’s planning was first reported by Bloomberg.