WASHINGTON, D.C.—President Biden announced his administration will release 30 million barrels of oil from the government’s reserves to help “blunt gas prices here at home.” The announcement came during last night’s State of the Union address and is one of the few ways Biden can buffer Americans from higher prices at the pump, reports the Wall Street Journal.
The U.S., along with its allies, agreed to collectively release an initial 60 million barrels of oil from strategic petroleum reserves, according to a statement from the Department of Energy.
Energy analysts say that President Biden has limited options to quickly lower prices given the complexities of the industry’s supply and demand.
(NACS sorts fact from fiction about gasoline prices in a series of popular Convenience Corner blog posts: “Does the President Control Gas Prices?”, “Why Gas Prices Are Rising When They Should Be Falling,” “Who Makes Money Selling Gas?”, “Will We See $4 Gas?”and “Will Gas Prices Affect Summer Travel?”)
Russia is one of the world’s largest oil and gas exporters, and the country’s attack on Ukraine has sent oil prices soaring, with Brent crude rising to $7 per barrel to close at $104.97 yesterday, the highest since 2014.
“We will continue advancing ongoing efforts to accelerate Europe’s diversification of energy supplies away from Russia and to secure the world from Putin’s attempts to weaponize energy supplies,” said U.S. Secretary of Energy Jennifer M. Granholm in the statement.
International Energy Agency Executive Director Fatih Birol said in a statement that the situation in the energy markets is “very serious and demands our full attention. Global energy security is under threat, putting the world economy at risk during a fragile stage of the recovery.”
ExxonMobil announced yesterday that it will exit Russia oil and gas operations and will not invest in new developments in Russia, following similar moves from bp and Shell. ExxonMobil’s operations in Russia are valued at more than $4 billion, according to the company.
“We deplore Russia’s military action that violates the territorial integrity of Ukraine and endangers its people,” said ExxonMobil in a statement.
ExxonMobil operates the Sakhalin-1 project on behalf of an international consortium of Japanese, Indian and Russian companies, and the company is beginning the process to discontinue operations and developing steps to exit the Sakhalin-1 venture.
“Our role as operator goes beyond an equity investment. The process to discontinue operations will need to be carefully managed and closely coordinated with the co-venturers in order to ensure it is executed safely,” said ExxonMobil.
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