Economy

Strategic oil reserves will be used in the United States – rts.ch

Strategic oil reserves will be used in the United States – rts.ch
Written by on100dayloans

The United States will draw on its strategic oil reserves to relieve households and lower the price of gasoline. Extremely rare, this decision announced Thursday by Joe Biden has only been taken three times so far in American history.

In a speech at the White House, the American president notably announced a contribution to the country’s strategic reserves. He said one million barrels would be injected into the market every day for the next six months, or “more than 180 million barrels”.

“This is a wartime transition,” he said, noting that increasing oil production would take “months.” This measure should make it possible “to increase the supply of oil until production accelerates later in the year”.

Lower prices at the pump in the United States

“We will use the revenues from the sale of oil now to replenish the strategic reserves”, detailed the American president, assuring that the United States would thus be “ready to face future emergencies”.

Joe Biden is struggling to try to stem the surge in prices at the pump, which is exasperating American households and from which the Republican opposition is making its honey in the campaign for the November legislative elections.

Criticisms of the American oil industry

The American president, who is trying to blame the phenomenon on the invasion of Ukraine and therefore on Vladimir Putin, also does not spare his criticism of the American oil industry, which he accuses of accumulating profits gargantuan without investing in production.

The Russian invasion of Ukraine has indeed boosted oil prices sharply. Producing countries continue to restrict their supply (read framed), which keeps prices high.

No more than 5% of US consumption

Interviewed on Friday on the RTS program Forum, the director of the Mirabaud bank in Geneva believes that Joe Biden’s decision will have a short-term effect. “We saw that the price of a barrel had fallen,” noted John Plassard.

“But a million barrels a day is not much for a country that consumes 20 million a day, it’s only 5%,” he added. “And the world consumption is 100 million barrels a day. So the United States gives a sign, but it does not depend only on them to calculate the price of oil”.

The banker stresses again that it is risky to dip into these strategic reserves. “If you empty these stocks, you will have to refill them, with more expensive prices and you are using fossil energy when we are in the idea of ​​energy transition. before Joe Biden in his election campaign”.

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