The United States is considering releasing 180 million barrels of oil over a period of several months from the US Strategic Petroleum Reserve, two sources said on Wednesday, which would mark the third time the Biden administration has tapped the reserve in the last six months.
Oil prices have rocketed higher in recent weeks, with the Brent benchmark surging at one point to $139 a barrel earlier in March after Russia's invasion of Ukraine and subsequent sanctions slapped on the nation by the United States and allies.
Worldwide oil supply has been tightening for months, exacerbated in recent weeks by expectations that Russian exports could fall by anywhere from 1 to 3 million barrels a day. Russia is the second-largest crude exporter behind Saudi Arabia.
Most other major crude producers are either at capacity or are unwilling to increase output as the world faces months of tightening supply. The United States, the world's largest crude producer, is currently pumping out 11.7 million barrels a day, but that is not enough to meet world demand.
The US Strategic Petroleum Reserve currently stands at 568.3 million barrels. This release would be the largest-ever since the reserve was created in 1974.
It is unclear if other members of the International Energy Agency, which include 29 other nations such as France, Germany and Japan, will follow the United States. The IEA has called an emergency meeting on Friday.
The United States announced a release of 50 million barrels in response to rising prices in late 2021, though an expected move in tandem from China did not materialize. The IEA, along with the United States, said it would release 60 million barrels earlier this month after the Russian invasion.
The United States also periodically releases oil on its own, sometimes through Congressionally legislated sales.
Washington has also released from its strategic reserve through exchange agreements, similar to loans, with private companies, often in the wake of local natural disasters. The companies have to repay by a certain date, with additional premium barrels as interest.