United States of America Faces Rising Oil Prices

US President Joe Biden expressed concern regarding the ongoing rising oil prices. As the Organization of the Petroleum Exporting Countries (OPEC) countries refuse to increase production, they even tinker with the map to release the Strategic Oil Reserve (SPR). The situation is so urgent. According to the Financial Times (FT) on the 11th, the likelihood that the Biden administration will supply SPR supplies to the market has increased. West Texas Intermediate (WTI) price climbed above $ 80 in more than a month after hitting $ 80.52 on the 11th of last month for the first time in seven years. Bank of America (BoA) warned that “if a cold wave hits this winter, global oil demand could rise to 2 million barrels a day, pushing the price of oil to $ 100 a barrel.” The FT analyzed that the US government has few ways to lower oil prices other than issuing SPRs.

In fact, in a recent letter to President Biden, Democratic senators called for “using everything, including using the SPR, to lower gasoline prices.” US Secretary of Energy Jennifer Granholm also said: “About 613 million barrels of SPR is a tool to use.” 2011 was the last time the US-supplied SPRs to the market. When the civil war broke out in Libya, the oil price surpassed $ 100 a barrel due to supply disruptions. Former President Barack Obama has partnered with the International Energy Agency (IAEA) to release 60 million barrels of oil through the United States. However, the problem is that even if the SPR is released, the effect is likely to be short-lived. In 2011, the price of oil fell again, surpassing $100 for the first time in three months.