Inadequate Intervention

For the third time in about four months, the administration of US President Joe Biden has tapped into the US Strategic Petroleum Reserve. The first two releases of 50 million and 30 million barrels of oil, respectively, occurred in November 2021 and in early March, during the US president’s first State of the Union address.

As US President Joe Biden warned in early March, American consumers are continuing to pay the price for the administration’s decision to ban Russian oil imports amid Russia’s special military operation in Ukraine.

In its latest effort, the Biden administration has ordered the daily release of some 1 million barrels of oil from the US Strategic Petroleum Reserve, totaling around 182 million barrels of oil from the reserve over the next six months.

“The scale of this release is unprecedented: the world has never had a release of oil reserves at this 1 million per day rate for this length of time,” Biden said. “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.”

Brent crude, an international benchmark for much of the world's oil, settled down $5.54 (4.9%), at $107.91 per barrel on Thursday, which marked the last day of trading for March, as well as the first quarter. Brent held a session low of $104.20 per barrel.

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