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.
JITTERS: Nexperia has a 20 percent market share for chips powering simpler features such as window controls, and changing supply chains could take years European carmakers are looking into ways to scratch components made with parts from China, spooked by deepening geopolitical spats playing out through chipmaker Nexperia BV and Beijing’s export controls on rare earths. To protect operations from trade ructions, several automakers are pushing major suppliers to find permanent alternatives to Chinese semiconductors, people familiar with the matter said. The industry is considering broader changes to its supply chain to adapt to shifting geopolitics, Europe’s main suppliers lobby CLEPA head Matthias Zink said. “We had some indications already — questions like: ‘How can you supply me without this dependency on China?’” Zink, who also
At least US$50 million for the freedom of an Emirati sheikh: That is the king’s ransom paid two weeks ago to militants linked to al-Qaeda who are pushing to topple the Malian government and impose Islamic law. Alongside a crippling fuel blockade, the Group for the Support of Islam and Muslims (JNIM) has made kidnapping wealthy foreigners for a ransom a pillar of its strategy of “economic jihad.” Its goal: Oust the junta, which has struggled to contain Mali’s decade-long insurgency since taking power following back-to-back coups in 2020 and 2021, by scaring away investors and paralyzing the west African country’s economy.
BUST FEARS: While a KMT legislator asked if an AI bubble could affect Taiwan, the DGBAS minister said the sector appears on track to continue growing The local property market has cooled down moderately following a series of credit control measures designed to contain speculation, the central bank said yesterday, while remaining tight-lipped about potential rule relaxations. Lawmakers in a meeting of the legislature’s Finance Committee voiced concerns to central bank officials that the credit control measures have adversely affected the government’s tax income and small and medium-sized property developers, with limited positive effects. Housing prices have been climbing since 2016, even when the central bank imposed its first set of control measures in 2020, Chinese Nationalist Party (KMT) Legislator Lo Ting-wei (羅廷瑋) said. “Since the second half of
AI BOOST: Next year, the cloud and networking product business is expected to remain a key revenue pillar for the company, Hon Hai chairman Young Liu said Manufacturing giant Hon Hai Precision Industry Co (鴻海精密) yesterday posted its best third-quarter profit in the company’s history, backed by strong demand for artificial intelligence (AI) servers. Net profit expanded 17 percent annually to NT$57.67 billion (US$1.86 billion) from NT$44.36 billion, the company said. On a quarterly basis, net profit soared 30 percent from NT$44.36 billion, it said. Hon Hai, which is Apple Inc’s primary iPhone assembler and makes servers powered by Nvidia Corp’s AI accelerators, said earnings per share expanded to NT$4.15 from NT$3.55 a year earlier and NT$3.19 in the second quarter. Gross margin improved to 6.35 percent,
RSS