US to release strategic oil reserves in coordination with major fuel user countries

In a bid to reassure Americans angry about inflation and goods shortages as they prepare for Thanksgiving -- and to lift his poll ratings -- President Joe Bidenon Tuesdaytapped the US strategic oil reserves.

Biden announced this coordinated plan to release 50 million barrels of crude from the country's oil reserves onto the market, hoping to ease the growing discontent about inflation and fuel costs.

The White House said that following weeks of negotiations, "this release will be taken in parallel with other major energy consuming nations, including China, India, Japan, Republic of Korea and the United Kingdom."

India plans to release 5 million barrels of oil from its caverns.

"It will take time but before long you should see the price of gas drop," Biden said in a speech at the White House.

According to a senior administration official, it is anticipated that the releases will begin in mid-to-late December, and"responding to a once-in-a-century pandemic," further interventions may be necessary to stabilise the market.

"The president stands ready to take additional action if needed and is prepared to use his full authorities, working in coordination with the rest of the world, to maintain adequate supply as we exit the pandemic."

Even as the US economy bounces back from the COVID-19 lockdowns, supply chain disruptions and inflation are stirring fears as the holiday season begins with Thanksgiving on Thursday.

"Moms and dads are worried asking will there be enough food we can afford to buy for the holidays? Will we be able to get Christmas presents to the kids on time?" Biden said, acknowledging that for many the price rises are "painful."

Critics, however, accuse him of failing to grasp the challenge.

The president pushed back on critics by noting that the two biggest trading ports, both located in southern California, were now working 24/7, as opposed to just 40 hours a week.

In the last few years, gasoline prices have fallen by about 10 per cent on the wholesale market, but at the pump, they remain the same.

"In other words, gas supply companies are paying less and making a lot more," he said, accusing companies of "pocketing the difference" between wholesale and retail prices.

Nevertheless, Biden's reassurances on tapping the oil reserve failed to impress Republican opponents.

"Joe Biden's failed leadership caused skyrocketing prices, and now American families are paying more for gas, groceries, and everything this Thanksgiving," Republican National Committee chair Ronna McDaniel said in a statement.

Watch |India, Japan working on oil-stock release

Due to an increase in production, oil prices have already dropped nearly 10 per cent in the last few weeks. Officials echoed Joe Biden's concern that gasoline prices for drivers have risen despite the decline in crude prices.

A senior official, speaking on condition of anonymity, said the government was looking into "anti-competitive practices" and will "examine whether illegal conduct is costing families at the pump."

(With inputs from agencies)