U.S. President Joe Biden announced Tuesday he has ordered the release of 50 million barrels of oil from the U.S. strategic reserves in a coordinated attempt with other countries — including Japan — to tamp down soaring fuel prices.

"This release will be taken in parallel with other major energy consuming nations including China, India, Japan, Republic of Korea and the United Kingdom," the White House said.

Japan was set to first release a few days worth of oil from its reserves, and has indicated it would release 5 million barrels or less. The Japanese government is set to formally announce the move Wednesday, local media reported.

Japan has never previously released crude oil stockpiles in response to rising prices. Past decisions to tap reserves were made to address supply concerns following natural disasters and overseas political turmoil.

It would be Japan’s first release of state oil reserves since the country complied with a request from the International Energy Agency in June 2011 due to the deteriorated situation in Libya.

Prime Minister Fumio Kishida’s Cabinet approved an economic stimulus package Friday with a record ¥55.7 trillion ($490 billion) in fiscal spending, which includes a subsidy program for oil wholesalers and importers to contain gasoline and kerosene prices once they hit a certain threshold to alleviate the financial burden.

For the Unites States' part, a Biden senior administration official told reporters this was "the first time we've done something like this in parallel with other" countries.

As the world emerges from the COVID-19 pandemic and subsequent lockdowns, oil production has not kept pace with rocketing demand, pushing prices up.

In the United States, an associated rise in gasoline prices is one of the main culprits in a surge of inflation.

Biden's announcement comes as Americans prepare for the holiday season, when travel ramps up.

Average fuel prices at filling stations are $3.41 a gallon, the highest level since 2014, according to latest figures from the AAA motorists' association. This represents an increase of $1.29 over gasoline prices a year ago.

The U.S. reserves, held in underground depots in Texas and Louisiana, are the largest emergency supply of oil in the world.

A senior administration official said the releases would start in mid-to-late December, and that further intervention was possible to steady the market, "responding to a once-in-a-century pandemic."

"As the president has said, consumers are facing pain at the pump right now," the official said.

"The president stands ready to take additional action if needed and is prepared to use his full authorities, working in coordination with the rest of the world, to maintain adequate supply as we exit the pandemic."

As output rises, oil prices are already down nearly 10% in the last few weeks. But officials echoed Biden's repeatedly stated concerns that despite easing of crude values, prices of gasoline for drivers have only gone up.

This has hurt ordinary Americans, while driving a sharp dive in Biden's approval ratings.

"There is mounting evidence that declines in oil prices and the cost of other inputs into gasoline are not translating into lower prices at the pump," said the senior official, who spoke on condition of anonymity.

The official said the government was looking into "anti-competitive practices" and will "examine whether illegal conduct is costing families at the pump."

The approach is "two-pronged. First, making sure that, you know, the price of oil is coming down, reflecting the fact that we have to have supply matching demand, but also making sure that those savings are passed through to consumers," he said.

"We expect the industry to be passing through the savings to consumers as quickly as possible."

Of the 50 million barrels, 32 million will be released from the U.S. Strategic Petroleum Reserve as an exchange over next several months, while 18 million will come from an accelerated release from previously authorized sales, the White House said in a statement Tuesday. It represents one of the biggest releases ever from the reserve, surpassing U.S. interventions amid Libyan unrest in 2011 and Operation Desert Storm in 1991.

The decision to collectively discharge stockpiled crude after OPEC+ countries rebuffed calls to significantly boost production marks a diplomatic win for the U.S. and a challenge to the grip that Saudi Arabia, Russia and other OPEC+ producers have on the market.

But it’s not without risk. OPEC+ officials warned they’re likely to respond by canceling plans to boost their own production, negating the addition of stockpiled oil onto the market. The standoff sets up a fight for control of the global energy market.

The tussle threatens to roil the geopolitics of oil. At stake is the price of the world’s most important commodity as politicians and central bankers contend with the strongest inflationary surge in more than a decade. It also shows the strained relationship between Washington and Riyadh, traditionally a cornerstone of U.S. relations in the Middle East.

"The market focus has shifted from the release to how OPEC+ will respond to what the White House is calling a ‘message to the Saudis’,” said Bob McNally, president of consultant Rapidan Energy Group and a former White House official under President George W. Bush. "If it comes to a test of wills and capabilities between a handful of strategic oil reserve holders led by the U.S. and OPEC+, the market would probably bet on the latter prevailing.”

Under the plan, the U.S. will conduct the exchanges over several months, with oil companies taking possession of the crude now and then returning supplies to the reserve later, when prices have eased.

Senior administration officials said the two-pronged oil release plan, the result of months of discussion and diplomacy, is tailored to the current market conditions, with oil prices that are high now expected to dip in coming months.

The administration can also make adjustments to the exchanges in coming months as it deals with a dynamic oil market, the administration official said.

The administration has worked to identify the best tools for addressing the current dynamic, one of the officials said. It has so far rebuffed calls from members of Biden’s own party to clamp down on exports of U.S. oil, amid warnings that could backfire by actually discouraging domestic production.

Biden has been seeking the joint release for weeks, including during a virtual summit with Chinese President Xi Jinping. Ultimately, China was among the countries that agreed to the move. Previous global efforts to tap stockpiles — such as the 2011 release of 60 million barrels in the wake of unrest and supply disruptions in Libya — were coordinated by the International Energy Agency.

"Tapping the SPR will provide much-needed temporary relief at the pump and will signal to OPEC that they cannot recklessly manipulate supply to artificially inflate gas prices,” Senate Majority Leader Chuck Schumer said in a statement.

At 50 million barrels, Tuesday’s announced action represents one of the largest-ever release from U.S. reserves, eclipsing past interventions that saw the U.S. putting 30 million barrels onto the world market.

It also surpasses the rapid drawdown of 33.75 million barrels that was ordered in 1991, amid Operation Desert Storm.

Asian countries joined the U.S. releasing oil, sending a political signal of support, but one with little oil market value as the quantities involved were small, disappointing traders.

India said it will release 5 million barrels, according to a statement. China didn’t disclose its contribution, but one Western official familiar with the matter said it would be relatively small, in the 7 million-to-15 million barrels range. South Korea said it will decide on details such as volume and timing after discussing with partner countries but indicated it could be about 3.5 million barrels. The U.K. contribution is expected to be even smaller, the same official said.

"This is a hugely political move, and the Asian countries are adding only small, largely symbolic amounts,” said Amrita Sen, co-founder of consultant Energy Aspects Ltd. in London.

Biden has been under increasing pressure to stem rising energy prices that threaten to undermine the economic recovery from the pandemic. OPEC+ earlier snubbed his request for a large production increase and instead raised output by just 400,000 barrels per day for December.

Rising motor fuel prices pose a political risk to any U.S. president. But Biden has added reason to worry, as high energy costs and rising inflation could hamper both the economic rebound from the pandemic and his ability to enact major social-spending legislation.

Business groups and Republican lawmakers said they opposed the move. Christopher Guith, senior vice president of the Chamber of Commerce’s Global Energy Institute, argued the reserve should only be tapped for true supply disruptions and said the Biden administration instead should focus on encouraging domestic oil production.

"America’s real strategic petroleum reserve is in places like the Permian Basin and the Gulf of Mexico,” Guith said in an emailed statement. "Instead of ineffectual Band-Aids, the White House should focus on policies that will encourage domestic production of oil and natural gas.”

The U.S. Strategic Petroleum Reserve, the world’s largest government stockpile, was established after the Arab oil embargo in the 1970s and has been tapped in response to Operation Desert Storm in 1991, Hurricane Katrina in 2005 and Libyan supply disruptions in 2011. It also has been used to bring down domestic gasoline prices, such as by President Bill Clinton weeks before the 2000 election, as well as to fund unrelated domestic legislation.

The reserve stood at 606.1 million barrels as of Nov. 12, enough to replace more than half a year’s worth of U.S. crude net imports. Current inventory is about 85% of its maximum authorized storage capacity, after withdrawals.

The Energy Department is already obligated by law to sell 260 million barrels of oil from the reserve by fiscal year 2027. Additional releases now could slightly lower prices, analysts say, though the effects would be temporary and could be muted by market expectations of a sale the Biden administration has spent weeks telegraphing.

The maximum draw-down capability is 4.4 million barrels a day, according to the Energy Department’s website, and it generally takes 13 days for oil from the reserve to reach the open market after a presidential decision. But the mere announcement that the reserve is being tapped could have an immediate, if short-lived, effect on oil prices.

The idea of wielding U.S. emergency oil stockpiles to blunt prices divides members of Biden’s own political party. House Majority Leader Steny Hoyer, a Democrat from Maryland, said Nov. 16 he was not in favor of the move and noted the SPR is meant to protect the U.S. from Middle East supply crunches.

U.S. refiners are currently exporting the most gasoline since 2018, before the pandemic started.

Under a 1975 law that established the reserve, a president can order a full draw down in the event of a "severe energy supply interruption” that threatens national security or the economy. A limited drawdown (up to 30 million barrels) can be ordered in the event of "a domestic or international energy supply shortage of significant scope or duration.”

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