US President Joe Biden yesterday was to announce that he would put the final 15 million barrels on the market from a record release of US strategic oil reserves, with more releases possible if fuel prices spike, a senior US official said on Tuesday.
The new tranche of oil from the Strategic Petroleum Reserve (SPR) would be “completing the 180 million barrel release authorized in the spring,” in response to price hikes linked to Russia’s invasion of Ukraine, the official said.
The order, which Biden was to announce in a speech, means the president would be “making clear that the administration is prepared to undertake significant additional ... sales this winter if they are needed due to Russian or other actions disrupting global markets,” the official said.
Photo: AFP
The decision to make the biggest ever dip into the emergency oil reserves — usually kept for responding to situations such as hurricane-related shutdowns at oil refineries — was Biden’s gambit to calm energy markets and shield the world’s biggest economy from Ukraine war shocks.
Major energy exporter Russia was hit with US and European sanctions soon after it invaded Ukraine in February, causing turmoil on markets.
In addition, the Kremlin has threatened to use its leverage over fuel supplies as an economic weapon against the West, which supports Ukraine’s fight to repel the invasion.
For Biden there are serious domestic concerns, with gasoline prices at one point averaging more than US$1.32 a liter, causing nationwide anger.
The official, who spoke on condition of anonymity, said that the Strategic Petroleum Reserve was not being used irresponsibly.
At the same time as announcing the 15 million barrel drawdown for delivery in December and flagging the possibility of more to come, Biden is highlighting a plan to refill the reserve as soon as prices hit about US$67 to US$72 a barrel, the official said.
This is “an important signal for producers that the SPR will be part of helping to moderate and stabilize price flows, not only when prices are going high, but when prices are going low,” he said.
The reserve remains in good shape, with more than 400 million barrels, the official said.
“That is still a large amount” and allows for “additional opportunity ... if we need to do more sales,” he said.
Asked whether the US could take the more radical measure of curbing fuel exports — something that would help tamp down domestic prices, but hurt foreign buyers, including in allied countries — an official declined to confirm or deny.
“We’re keeping all tools on the table,” said the second official, who also spoke on condition of anonymity.
Crude oil prices have rebounded this month after losing more than 20 percent last quarter as OPEC and its allies agreed on the biggest production cut since 2020.
OPEC+ defended its move, saying it was justified by the growing risk of a global recession, while Chinese oil demand is still in limbo amid COVID-19 lockdowns and concerns of a global economic slowdown.
West Texas Intermediate pared some gains after rising as much as 1.6 percent. Futures dropped 7 percent in the previous three sessions on the US attempts to tamp down prices.
STRONG INTEREST: Analysts have pointed to optimism in TSMC’s growth prospects in the artificial intelligence era as the cause of the rising number of shareholders The number of people holding shares of chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) hit a new high last week despite a decline in its stock price, the Taiwan Depository and Clearing Corp (TDCC, 台灣集保) said. The number of TSMC shareholders rose to 2.46 million as of Friday, up 75,536 from a week earlier, TDCC data showed. The stock price fell 1.34 percent during the same week to close at NT$1,840 (US$57.55). The decline in TSMC’s share price resulted from volatility in global tech stocks, driven by rising international crude oil prices as the war against Iran continues. Dealers said
PRICE HIKES: The war in the Middle East would not significantly disrupt supply in the short term, but semiconductor companies are facing price surges for materials Taiwan’s semiconductor companies are not facing imminent supply disruptions of essential chemicals or raw materials due to the war in the Middle East, but surges in material costs loom large, industry association SEMI Taiwan said yesterday. The association’s comments came amid growing concerns that supplies of helium and other key raw materials used in semiconductor production could become a choke point after Qatar shut down its liquefied natural gas (LNG) production and helium output earlier this month due to the conflict. Qatar is the second-largest LNG supplier in the world and accounts for about 33 percent of global helium output. Helium is
Taiwan’s natural gas supply remains stable through the end of May, despite rising concerns about potential disruptions to Qatari liquefied natural gas (LNG) supplies due to escalating conflicts in the Middle East, the Ministry of Economic Affairs said yesterday. The ministry in a statement said that Taiwan has completed preparations for natural gas supply and shipping schedules through the end of May. It has also made plans to increase natural gas imports from regions outside the Middle East in June to ensure a stable supply, it added. Taiwan sources natural gas from 14 countries and is not solely dependent on the Middle East,
China is clamping down on fertilizer exports to protect its domestic market, industry sources said, putting an additional strain on global markets that were already grappling with shortages caused by the US-Israeli war on Iran. China is among the largest fertilizer exporters — shipping more than US$13 billion of it last year — and it has a history of controlling exports to keep prices low for farmers. Shipments through the war-blocked Strait of Hormuz account for about one-third of the sea-borne supply. This month, Beijing banned exports of nitrogen-potassium fertilizer blends and certain phosphate varieties, sources said. The ban, which has not
RSS