The U.S. Department of Energy announced the loan of 13.4 million barrels of crude oil from its strategic reserves as part of an ongoing effort to contain oil prices that have surged to their highest level in nearly a decade.
The release marks the second-largest exchange of oil from the Strategic Petroleum Reserves ever and brings the total amount of oil released from the cache to nearly 40 million barrels, according to the U.S. Energy Department.
Last November, U.S. President Joe Biden announced plans to release 50 million barrels from the Strategic Petroleum Reserves in a move coordinated with India, Japan, South Korea and China that marked an unprecedented effort to reduce oil prices and ease OPEC’s stranglehold on supply.
U.S. crude prices are now higher than they were in October, when the Biden administration began touting plans to release the country’s emergency reserves. This year alone, benchmark West Texas Intermediate crude oil prices have gained more than 13% as demand has outpaced supply.
Benchmark West Texas Intermediate crude rose 2.8% to settle at $85.60 U.S. a barrel. The average price of U.S. regular unleaded gasoline, which has risen for 10 consecutive days, was $3.34 U.S. a gallon earlier this week.
The surge in fuel costs threatens the U.S. economic rebound and poses political risks for Biden’s presidency and the ability of Democrats to retain control of Congress in mid-term elections this fall.
OPEC and its allies have been falling short of meeting monthly quotas that were part of a plan to boost production. Some of its members have endured setbacks from unrest that had disrupted output including Libya, Nigeria and Kazakhstan.
The oil taken from the U.S. Strategic Petroleum Reserves is expected to be replaced by 2024, the White House has said.
