Washington: United States President Joe Biden has ordered 50 million barrels of oil released from the strategic reserve to help bring down energy costs.
The move was done in coordination with other major energy-consuming nations, including China, India, the United Kingdom, Japan and South Korea, the White House said.
“This coordinated action will help us deal with the lack of supply, which in turn helps ease prices,” President Biden said in remarks at the White House.
“Today, we’re launching a major effort to moderate the price of oil, an effort that will span the globe in its reach and ultimately reach your corner gas station, God willing,” Biden said.
“Before long, you should see the price of gas drop,” the president said.
A senior administration official told reporters the releases would start in mid to late December, and that further intervention was possible to steady the market as the US government continues to respond to a “once-in-a-century pandemic”.
“As the president has said, consumers are facing pain at the pump right now,” the official said.
While aimed at global energy markets, the release of the oil also has political implications as US voters prepare to cope with higher inflation and rising prices ahead of US Thanksgiving and winter holiday travel.
Petrol prices are at about $3.40 a gallon, more than double their price a year ago, according to the American Automobile Association.
The US Strategic Petroleum Reserve, started in 1975, is an emergency stockpile to preserve access to oil in case of natural disasters, national security issues and other events.
It is the largest known emergency oil reserve in the world and is maintained by the Energy Department. The reserves are stored in caverns created in salt domes along the Texas and Louisiana Gulf Coasts.
There are roughly 605 million barrels of petroleum in the reserve, which can hold up to 714 million barrels.
The Biden administration has argued that the supply of oil has not kept pace with demand as the global economy emerged from the pandemic, and the reserve is the right tool to help ease the problem.