US President Joe Biden believes that the US will be able to ramp up its own oil output rates by the end of 2022. Until then, the White House aims to satisfy the domestic petroleum demand at the expense of strategic oil reserves.
Washington resorted to this measure after it had imposed the embargo on Russian oil imports that triggered a rapid rally in oil prices. The White House said that once the strategic reserves are released, the US would supply the oil global market with 1 million barrels per day.
Biden’s administration is ready to tap the nation’s strategic petroleum reserve for the next six months. Besides, the US leader confirmed that national oil inventories had piled up to historic rates. “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,” the White House said in a communiqué. “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.”
Analysts reckon that record petroleum supplies will considerably prop up the US commodity market and ensure its stabilization until American oil drillers pump up output rates.
The implementation of this scenario will enable the US Energy Department to spend revenue on replenishing strategic crude reserves. The government arranges petroleum reserves in case the market suffers an oil deficit that could emerge because Russian oil imports are unavailable due to the geopolitical chaos.
The spike in energy prices worldwide was caused by the ban on Russian oil in response to Russia’s invasion of Ukraine. “As Russian oil comes off the global market, supply of oil drops, and prices are rising. Now Putin’s price hike is hitting Americans at the pump,” Joe Biden noted.
The recent rally in the global energy market is to blame for a jump in domestic gasoline prices. The national average price of gasoline cost $3.30 per gallon (3.78 liters) in early January. In April, it is almost $1 up at $4.20 per gallon.
At present, domestic companies of the oil and gas sector drill on more than 12 million acres of federal land. In late March – early April, the government issued 9,000 permits for oil production. Crude output rates are expected to increase by 1 million barrels per day nationwide in 2022 and by 700,000 barrels per day in 2023.
