The US President announced the biggest action in history, the price of oil “skied”

Oil prices fell sharply after the announcement of US President Joe Biden’s export of 1 million barrels of oil per day. (Source: AP)

This is an “unprecedented” level because the world has never produced oil reserves of up to 1 million barrels per day for such a long time.

This move comes in the context of the conflict between Russia and Ukraine causing gasoline prices to soar. Many customers are refusing to import Russian oil, reducing overall world supply and increasing demand for oil from elsewhere.

This has put additional pressure on the Biden administration, which has previously struggled with rising consumer prices and criticism from Republicans.

Previously, SPR had released oil reserves, including 30 million barrels earlier this month. The barrels will act as a bridge until the US adds output and other production the administration expects later this year, a senior administration official said.

The US government is pressuring domestic oil companies to increase domestic drilling activities, at locations where drilling permits have been approved but have not yet commenced.

The White House said President Biden will call on Congress to pass legislation that would force companies to pay fees for oil wells from leases that have been unused for years and on public lands with no production activity. export.

After the US decision, oil prices fell sharply on March 31 (US time). Specifically, on the New York Mercantile Exchange, the price of WTI oil for May delivery fell $7.54, or 7%, to $100.28 a barrel, while the price of North Sea Brent crude for May delivery also fell. $5.54, or 4.9%, to $107.91 a barrel on the ICE London Exchange.

On the same day, the announcement after the 27th ministerial meeting of the member countries of the Organization of the Petroleum Exporting Countries (OPEC+) and non-OPEC said that OPEC+ would raise output to 432,000 bpd. since May, slightly above the 400,000 bpd the block announced months ago.

OPEC+ also agreed to meet next time on May 5.