With the US mid-term elections approaching in November, high inflation, especially high oil prices, continued to cause dissatisfaction among voters, and the Biden administration began to take action one after another. Reuters reported on October 20 that Biden announced the release of 15 million barrels of strategic oil reserves this week. In his speech, he acknowledged that high oil prices are causing American families to suffer. At the same time, Biden took aim at American energy companies, calling on them to increase production capacity. The speech was immediately opposed by the American Petroleum Institute. Sommers, chairman and CEO of the American Petroleum Institute, responded to Biden by saying that this move is putting the United States in a very dangerous situation. Bloomberg also reported that the White House has asked the U.S. Department of Energy to analyze the possible impact of a ban on U.S. exports of refined products such as gasoline and diesel. Middle East media said that Biden's plan does not serve the purpose of curbing oil prices. Banning oil exports will only hurt the United States itself, but not OPEC countries.
According to Reuters, the Biden administration has gradually released strategic crude oil reserves since May 2022 to stabilize oil prices, with a total release scale of a record 180 million barrels. After the release of the above-mentioned 15 million barrels of strategic crude oil reserves, this round of release plans has been completed. Biden also said the administration would work to increase U.S. oil production without delaying the transition to clean energy. When oil prices fall to $70 a barrel, the U.S. government will buy back oil to replenish the Strategic Petroleum Reserve. As of the 21st, U.S. WTI crude oil futures closed at $85 a barrel.
Biden's latest energy policy has come under fire from many lawmakers. The Republican Party has long advocated increasing domestic oil production in the United States, while the Biden administration has advocated green energy and controlled oil production. "Releasing a large strategic oil reserve is a short-sighted and dangerous choice that jeopardizes America's energy security at a critical time of global uncertainty," said Senator Jerry Moran, Republican of Kansas. "I call on Biden to release America's energy production capacity instead." Senator John Barrasso of Wyoming said on social media: "The Strategic Petroleum Reserve was built to deal with the national energy crisis, not the Democratic election crisis. Biden's dismal approval rating is not Justification for continuing to plunder our nation's oil reserves."
The highest inflation in the United States in 40 years has been running at a high level for several months, and it is difficult to form an inflection point. In this case, it is difficult to see the effect of stabilizing prices by releasing strategic oil reserves. The Biden administration, knowing that it cannot do it, is actually seeking political interests in the upcoming mid-term elections as a political gesture. Biden administration has no more effective way to turn inflation around than sharply raising interest rates.
Biden needs to make such a political gesture to win the hearts and minds of the people. Although the effect is not large, still reluctant to give up efforts.