US president Joe Biden is clear-eyed that the drawdown of strategic oil reserves he negotiated will not quickly end his woes over inflation, but the chance to push back on Opec+ and do something on fuel prices that are near seven-year highs proved too tempting to resist.
As part of the drawdown, the US will sell 18mn bl of sour crude from its Strategic Petroleum Reserve (SPR) and loan out up to 32mn bl. India plans to sell 5mn bl of crude, while the UK will allow voluntary releases of up to 1.5mn bl of oil. Japan will bring forward planned sales of its emergency stocks, while South Korea and China plan to join but have not offered specifics. “While our combined actions will not solve the problem of high gas prices overnight, they will make a difference,” Biden says. The global drawdown could total 71.5mn bl and increase supply by 1.2mn b/d if it occurs over a two-month period, consultancy Rystad Energy says.
