Biden to order 1 million barrels of oil per day released from US reserves as ‘wartime bridge’ for higher domestic production

‘The President has said from the start that standing up to Putin's aggression would never be painless, but he's committed to doing everything he can help American families’

President Joe Biden will authorise release of 1 million barrels of oil from US strategic petroleum reserves each day over the next six months as a “wartime bridge” to expected higher domestic production, White House officials said.

Mr Biden is expected to make the announcement on Thursday as part of a plan to combat rising energy prices as a result of Russian president Vladimir Putin’s unprovoked invasion of Ukraine and the drop in supply brought on by US sanctions.

“The President has said from the start that standing up to Putin's aggression would never be painless, but he's committed to doing everything he can help American families,” said a White House official who briefed reporters on Mr Biden’s plan.

The official said the “historic” release from the US reserves is being coordinated with similar releases by allies, and is meant to “immediately shore up global supplies” until an expected increase in domestic oil production makes up the shortfall produced by removing Russian oil from the market.

Proceeds from reserve sales will be used to restock it when prices go down, the official added.

Mr Biden is also expected to announce a proposal to incentivise oil companies that hold drilling leases on public land to begin using those leases, by proposing Congress “make companies pay fees on unused wells on federal land, and on acres of public land they’re sitting on without producing”.

“We know it will take months — not days — for that production to come online, including through the kinds of measures the President is laying out today. We need to bridge to that additional supply, that's why the President is announcing a historic release of a million barrels a day over the next six months from the Strategic Petroleum Reserve,” the official said. “These barrels will be a wartime bridge to additional US production and other production that we expect later this year”.

The official added that the White House believes “there should be consequences” if a company is sitting on unused land or unused wells through the “use it or lose it” policy Mr Biden will propose.

“Some leaders in the industry have said that it doesn't matter where the price point is, they’re not going to produce more — we don't think that's the right thing, we think these companies need to be stepping up,” they said.

Asked whether Mr Biden had consulted with Opec members such as Saudi Arabia before deciding on releasing more oil from US reserves, a National Security Council official said he “has always been in touch with relevant partners”.

“The President has been clear that he will act if needed to provide additional oil supply to calm turbulent markets. and when there's an oil disruption, such as the one that we're facing today,” they said. “We know that consumers need relief now, and that's why the President has acted”.