The United States decided to withdraw an additional 15 million barrels of oil from its strategic reserve in an attempt to reduce the prices of black gold, while President Joe Biden does not rule out using more of this reserve, a US official said Tuesday.

Biden will announce this decision in a letter Wednesday, said the same official, who asked not to be identified, noting that the president "will make clear that the administration is prepared to make significant additional sales this winter if they are needed due to Russian or other actions disrupting global markets."

This amount, which will be pumped into the market in December, is the last tranche of a program announced by the US president in the spring to release 180 million barrels to counter the high oil prices associated with the Russian invasion of Ukraine.

"The president has instructed the Department of Energy to prepare to sell more (SPR oil) this winter if necessary, whether because of Russia or because of other activities that could disrupt the market," the senior US official told reporters.

And imposed on Russia, the largest energy exporter, US and European sanctions shortly after its invasion of Ukraine in February, causing turmoil in the markets. The Kremlin has threatened to use its influence on energy supplies as an economic weapon against the West, which supports Ukraine in repelling the invasion.

- 'All tools on the table' -

Biden sees serious concerns at the local level as gasoline prices average more than $5 a gallon, causing outrage in the country.

Inflation remains the biggest factor that Republicans focus on to defeat Democrats in the mid-term legislative elections in November.

News of Biden's decision, which was reported by a number of US media outlets during the day, was sufficient to reduce prices, as the price of a barrel of West Texas Intermediate oil - for November delivery - fell by 3.08% to close at $82.82 a barrel.

But the impact of the announcement of this step declined after that in the electronic exchanges of the Chicago Mercantile Exchange (Chicago Mercantile Exchange - CMI).

At about 23:45 GMT, the price of a barrel of West Texas Intermediate crude rose more than one percent, while the injection of millions of additional barrels into the market should theoretically lead to lower prices.

In response to a question about the possibility of limiting US oil exports or suspending these exports temporarily, the same official explained that the Biden administration "keeps all tools on the table, everything that can help secure supplies" of the US market.

The senior official emphasized that the strategic oil reserves were not used irresponsibly.

He explained that President Biden intends at the same time to put in place a mechanism that would rebuild this reserve in the long term, noting that the US government will start buying back oil when the price of West Texas Intermediate crude drops to between $67 and $72 a barrel.

- Precautions in good standing -

This is an "important signal to producers that the strategic reserve will be part of helping moderate and stabilizing the path of prices, not only when they rise but also when they fall," said the official, who asked not to be identified.

He stressed that the reserves are still in good condition, with more than 400 million barrels. He said that "this remains a large quantity" and allows "an additional opportunity (...) if we need to sell more quantities".

The official described the use of the strategic oil reserves as a "fantastic" bridge out of the crisis and playing a "great constructive role during a very difficult period."

The US administration intends to negotiate contracts to repurchase at a pre-agreed price through auction procedures, which will reduce the risks associated with price volatility, according to the same official.

Since the beginning of September 2021, the United States has withdrawn more than 212 million barrels from the strategic reserve, which reached its lowest level since June 1984. No American president has previously ordered the release of these quantities since the creation of these reserves in 1975.

The official told reporters that the president also appeals to oil companies to "immediately show their customers low energy prices," noting that "keeping prices high when costs are low is unacceptable."

With the November 8 legislative elections approaching, Biden is doing his best to reduce fuel prices in the United States, as this may have a negative impact on his popularity and the results of his Democratic Party candidates in the elections.

Gasoline prices have fallen 22 percent since mid-June when they peaked, but they are still 16 percent above the level they were in the same period last year.

As for diesel, its price has fallen slightly since June, due to the small stock of this commodity, which is sold today, by more than 50% compared to the price it was in last year.

Source: AFP