Price of oil plummeted after news that the US may take further initiatives to reduce high gasoline expenses.
According to reports, the Biden administration is considering releasing up to 180 million barrels of oil from the Strategic Petroleum Reserve in the coming months.
If confirmed, this will be the reserve’s greatest release since its inception in 1974.
Concerns about supply disruptions have shaken global energy markets in recent weeks as a result of the conflict in Ukraine.
In Asian afternoon trade, West Texas Intermediate was down 5.4 percent at $102 a barrel. While Brent Crude was down 4.6 percent at approximately $108.
The rising cost of gasoline has become a major political issue in the United States ahead of the November midterm elections.
Mr. Biden will speak at 13:30 local time (17:30 GMT) on Thursday on “his administration’s initiatives to limit the impact of [Russian President Vladimir] Putin’s price hike on energy costs and cut gas prices at the pump for American people,” according to the White House.
The announcement of a possible big oil release by the United States came as the Organization of Petroleum Exporting Countries (Opec) and its allies, including Russia, were set to meet on Thursday.
Opec+, the group of major oil-producing countries, is anticipated to continue with its existing agreement to gradually boost output.
Rise In Price Of Oil
Oil prices have risen in recent weeks. Brent Crude surpassing $139 a barrel earlier this month following Russia’s invasion of Ukraine and US-led sanctions against Moscow.
Although energy prices have dropped since then, Brent Crude is still about 70% higher than it was a year ago.
The United States, the world’s largest oil producer. It is now producing 11.7 million barrels per day, but this is insufficient to meet global demand.
Meanwhile, an emergency meeting of the International Energy Agency has been scheduled for Friday.
It’s uncertain whether other IEA members will follow the United States in releasing oil reserves. This includes the United Kingdom, France, Germany, and Japan.