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U.S. energy envoy says Biden stands ready to release the oil reserves to cool markets

U.S. energy envoy says Biden stands ready to release the oil reserves

December 2, 2021: -President Joe Biden’s administration stands ready to release even more barrels of oil from its strategic reserves should the need start again, according to the U.S. State Department’s senior advisor for global energy security.

“Absolutely. This is a tool that was to us and will be available again,” Amos Hochstein told CNBC in Dubai, the United Arab Emirates, on Monday.

His comments come as energy analysts assess the effectiveness of a U.S.-led pledge to release millions of barrels of oil from strategic reserves after OPEC+ producers had resisted calling to pump more to help cool the market.

“Remember, this was not a 50-million-barrel release; 30 million barrels were an exchange that the companies and traders can take the oil now and return it more than a scheduled period. That means the Strategic Petroleum Reserve will be replenished,” Hochstein said.

“And therefore, we have the flexibility to be able to do this again in the future if the need arises. We wanted to do something impactful for the market, and that had the ability and the flexibility allowing to do that again should the need arise for the American economy.”

In the first move of its kind, Biden announced on November 23 the coordinated release of oil amid the U.S., India, China, Japan, South Korea, and the U.K.

As planned, the U.S. is to release 50 million barrels from the Strategic Petroleum Reserve. A total, 32 million barrels will be exchanged over the next several months, while 18 million barrels will accelerate a previously authorized sale.

OPEC and allied non-OPEC producers, an influential group called OPEC+, have ignored U.S. pressure to increase crude supply to stymie surging fuel prices.

Led by OPEC kingpin Saudi Arabia and non-OPEC leader Russia, the group meets again to discuss the next phase of production policy.

There is little sign the group intends to change tack from their current output plan.

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