US releases 50 million barrels of oil to ease energy costs

US releases 50 million barrels of oil to ease energy costs

Washington – The White House said on Tuesday that it had ordered the removal of 50 million barrels of oil from the strategic reserve to reduce energy costs, in coordination with other countries including China.

This move is an attempt to reduce the soaring gas prices. Gasoline prices across the country average about $3.40 a gallon, more than double what they were a year ago, according to the American Automobile Association.

The Strategic Petroleum Reserve is a contingency stock to maintain access to oil in the event of natural disasters, national security issues and other events. The reserves are held by the Department of Energy, and they are stored in caves created in salt domes along the Gulf of Texas and Louisiana coasts. There are approximately 605 million barrels of sweet and sour oil in reserve.

The Biden administration has argued that oil supply has not kept pace with demand as the global economy has emerged from the pandemic, and reserves are the right tool to help mitigate the problem.

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The decision comes after weeks of diplomatic negotiations and the release will be taken in other countries in parallel including India, Japan, the Republic of Korea and the United Kingdom, which are major energy consumers.

The US Department of Energy will provide oil from the Strategic Petroleum Reserve in two ways; The White House said 32 million barrels will be released in the next few months and will return to reserves in the coming years. Another 18 barrels will be part of the oil sale that was previously approved by Congress.

White House press secretary Jen Psaki said Monday night that the White House will monitor oil companies as well.

“We will continue to put pressure on the oil companies that have achieved record profits and oversee what we consider price gouging there when there is a supply of oil or when the price of oil goes down and the price of gas does not go down,” Psaki said. it’s a problem”.

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