News
Oil prices drop as Biden considers releasing reserves
If confirmed, this will be the largest-ever release since the reserve was created in 1974.
The war in Ukraine has rocked global energy markets in recent weeks over concerns that supplies will be cut.
In afternoon trade in Asia, US oil benchmark West Texas Intermediate was 5.4% lower at $102 a barrel, while Brent Crude was down by 4.6% at around $108.
The soaring cost of fuel has become a major political issue in the US ahead of mid-term elections in November.
The group of major oil producing nations, which is known as Opec+, is expected to stick to its existing deal to gradually increase production.
The cost of oil has jumped in recent weeks, with Brent Crude hitting $139 a barrel earlier this month after Russia’s invasion of Ukraine and sanctions slapped on Moscow by the US and its allies.
Energy prices have fallen back since then, but Brent Crude is still almost 70% higher than it was a year ago.
Global energy supplies had been tightening for months as economies started to reopen as they relaxed pandemic lockdown measures.
Russia is the world’s second-biggest oil exporter after Saudi Arabia.
Most other major energy producing nations are either at full capacity or are unwilling to increase output.
The US, which is the world’s largest oil producer, is currently pumping out 11.7 million barrels of oil a day, but that is not enough to meet global demand.
Meanwhile, the International Energy Agency has called an emergency meeting for Friday.
It is unclear whether other IEA members – which include 29 nations such as the UK, France, Germany and Japan – will follow the US by releasing oil reserves.
The country’s industry minister said the actions include government support to boost domestic production, alternative procurement and to help technological developments to reduce use of the materials, which include liquefied natural gas and gases used in computer chip-making.