Given the rise in crude oil, Washington will resort to its strategic reserves like never before

The President of the United States, Joe Biden, confronted with inflation record undermining his popularity, he promised on Thursday “relieve homes” in the face of rising gasoline prices, in particular by announcing an unprecedented use of the country’s strategic reserves.

He also attacked the oil companies that “they remain sitting on their record winnings” instead of increasing production on US soil, during a speech at the White House.

Joe Biden ordered the removal of one million barrels of strategic oil reserves per day for six months, an initiative ” unprecedented “ in American history, the White House announced Thursday, March 31. The prospect of this record American black gold spill was already driving prices down on Thursday in London and New York by around 5%.

This initiative must According to a statement from the US executive, Serve to “make the transition to production [américaine] increases at the end of the year. The US administration will use the proceeds from the sale of these reserves to replenish stocks ” in the next years “.

The White House, which the Republican opposition accuses of weighing down oil activity in the United States, promises “do everything [qu’elle] can “ to encourage extraction in the United States. Joe Biden, for example, is now asking Congress to impose fines on businesses that have the necessary permits and land, but do not operate it.

Still with the idea of ​​strengthening US energy independence, the president will invoke the Defense Production Law, a text inherited from the Cold War that allows him to make economic decisions by decree, to encourage the development of green energies.

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salt caves

The Democratic president has tried since the Ukraine invasion to blame Russian President Vladimir Putin for the rise in inflation, even though the rise in prices had started earlier. But this rhetoric doesn’t seem to be convincing Americans, as midterm elections loom in the fall that threaten to reduce Joe Biden to impotence for the remainder of his term. His confidence index barely exceeds 40%, according to various surveys, a very low level.

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The Strategic Petroleum Reserves of the United States were created in 1975 to counter oil crises. Buried in huge salt caverns up to 800 meters deep along the coast of the Gulf of Mexico, they can store up to 714 million barrels of black gold, but currently contain 568 million barrels.

The US administration has already been drawing continuously from these strategic reserves since the fall, when the rise in oil prices began: it announced in November that it wanted to release 50 million barrels, then again 30 million in early March.

Inflation

According to the latest inflation indicator, the PCE index published Thursday by the Commerce Department, consumer prices continued to rise in March in the United States, rising 6.4% in a year and 0.6% in a month. With the mid-term legislative elections approaching, the White House has made the fight against these runaway prices -unheard of since the 1980s- one of its priorities.

On March 7, oil hit all-time price records reached during the 2008 financial crisis, topping $130 a barrel, only to fall back to between $100 and $110 today. The price of gasoline at the pump in the United States surpassed its 2008 peak, well above $4 per gallon (3.78 liters).

The world with AFP

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