Biden orders record release of US oil reserves to curb 'Putin's price hike'

A six month release of a million barrels daily is the largest and most sustained ever tapping of the stockpiles in US history

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President Joe Biden on Thursday announced the release of a record million barrels of oil a day from US strategic stockpiles to curb soaring prices due to what he called "[Russian President Vladimir] Putin's price hike".

Families' budgets for filling up their cars should not "hinge on whether a dictator declares war," Mr Biden said.

A six month release of a million barrels daily is by far the largest and most sustained ever tapping of the stockpiles in US history. The release would amount to augmenting global supplies by about one per cent.

“The bottom line is if we want lower gas prices we need to have more oil supply right now,” the president said.

The president took a swipe at oil companies currently leveraging the crisis to focus on profits instead of releasing more barrels.

"No American company should take advantage of a pandemic or Vladimir Putin's actions to enrich themselves at the expense of American families," he said.

Mr Biden also called for Congress to pass his "use it or lose it" policy, which will make companies pay pay fees on idle wells that they are hoarding without production.

House Speaker Nancy Pelosi told reporters on Tuesday that lawmakers are weighing options to address Mr Putin's "price hike at the pump". Efforts by Congress to implement a federal gas tax have stalled, but other ideas are under discussion.

Executives of six oil companies agreed to testify before a US House committee next week on the rising cost of petrol.

Oil prices fell sharply on the initial reports of Mr Biden's announcement, which came as the OPEC+ group of petroleum exporters decided to raise output only modestly despite the jump in crude prices in the wake of key energy supplier Russia's decision to invade Ukraine.

The release dwarfs earlier uses of the strategic stockpile in tandem with other countries on March 1 following the Russian invasion, and also last year in response to rising inflation.

Despite a strongly rebounding economy and rapidly receding Covid-19 pandemic, Mr Biden is getting little credit from voters, who instead blame him for rising prices everywhere from the supermarket to car dealerships.

"Look, I know [rising] gas prices are painful, I get it. My plan is going to help ease that pain today and safeguard against tomorrow," Mr Biden said.

Supply chain snags related to the different pace of economic recoveries around the world are part of the inflation phenomenon. Also underlying the politically perilous trend, however, are ever higher fuel costs, which in turn push up prices for transport of almost all goods.

Gasoline prices currently stand at an average of $4.23 a gallon, up 47 per cent from their level a year ago.

The price of US benchmark West Texas Intermediate was down 4.6 per cent to $102.89 a barrel, while Brent oil futures were down 5.5 percent at $107.20 a barrel.

Oil prices surged close to $140 a barrel in March on worries about lost Russia crude supply as some "self sanctioning" oil buyers shunned Russian crude in the wake of international sanctions on Moscow.

Prices have retreated somewhat since the US banned Russian energy imports on March 8, but have lingered above $100 a barrel most of the subsequent period.