15 million barrels of oils will be released from the Strategic Petroleum Reserve in December of this year, President Biden announced last week. The move comes as the US government attempt to reduce the price of gas.
This is part of the plan that was announced earlier in the year to release 180 million barrels by the end of 2023. This 15 million will be released in December, but a specific date has not been put forward yet.
Releasing this oil should provide confidence that there will not be a shortage, and the hope is that this will help prices to remain stable. However, this is not a strategy that everyone is convinced will work.
The markets may have been expecting this announcement to have been made shortly anyway, and 15 million barrels is less than 10% of the whole 180 barrels that are being released. This may not calm prices by as much as was hoped.
The move may be also be seen as attempt to push back against OPEC+, who have recently reduced their output by 2 million barrels a day. This action has been heavily criticized by the US, and the release of the Strategic Petroleum Reserve could be seen as action taken to show that the US is also able to influence pricing.
