The White House said Thursday that US President Joe Biden would announce the “largest release” of oil reserves in history in an effort to bring down gas prices across the country and the globe.
“After consultation with allies and partners, the President will announce the largest release of oil reserves in history, putting one million additional barrels on the market per day on average – every day – for the next six months,” a statement from the White House said.
“The scale of this release is unprecedented: the world has never had a release of oil reserves at this one million per day rate for this length of time. This record release will provide a historic amount of supply to serve as a bridge until the end of the year when domestic production ramps up.”
The White House blamed the rising gas prices in the US on Russian President Vladimir Putin. “Since Putin accelerated his military build-up around Ukraine, gas prices have increased by nearly a dollar per gallon,” the statement read.
“Because of Putin’s war of choice, less oil is getting to market, and the reduction in supply is raising prices at the pump for Americans,” the statement said referring to the invasion of Ukraine, which has entered its second month.
But a senior IMF official and experts have said that the issue of increased oil prices had nothing to do with supply.
“There has not been a supply shock for the prices to increase in the way they have; this is a geopolitical issue,” the IMF official previously told Al Arabiya English, adding that there had been underinvestment in oil production over the last five years or so.
The US has also failed to convince OPEC+ member states to increase their output.
It is worth noting that prices being paid at the pump are not reflective of the cost of oil that day. One factor in determining oil prices is supply and demand. In today’s market, there is no shortage of supply.
Another factor is speculation and what the price of oil will be in the future.