US President Joe Biden has ordered the release of millions of barrels of oil from America’s reserves in an unprecedented effort to bring down the cost of fuel, which has skyrocketed in recent weeks.
Reuters reports that a release of 180 million barrels of oil over the next six months is the largest since the reserve was created in 1974.
The move has been welcomed by many, while oil prices already began to come down after the announcement, as the policy move seeks to ease severe supply shortages sparked by Russia’s war against Ukraine.
President Biden, aware that it may not be enough to tackle shortages and rising prices, said the move is intended to act as a bridge until domestic production ramps up and meets new targets.
The rising cost of fuel has become a political issue around the world. The EU recently signed a landmark agreement for the USA to provide LNG, used in the production of electricity, with the US committed to provide fifteen billion additional cubic metres by the end of the year.
Global demand for energy had been rising as countries around the world drop COVID restrictions and pent-up demand is released. However, the war in Ukraine has raised fears of supply issues, with analysts warning Russian exports of oil could fall by as much as three million barrels a day.
In addition, Russia has taken steps to force ‘unfriendly’ nations purchasing oil from it to pay in roubles, in an attempt to prop up the currency after international sanctions wreaked havoc on Russia’s economy.
A decree by Russia’s Government says unfriendly nations must open bank accounts with Russian banks by today, in order for payments for Russian gas to be paid out in roubles.
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