US releasing 30M barrels of oil to curb price spikes amid Ukraine crisis

WASHINGTON

President Joe Biden authorized the release of 30 million barrels of oil from the US's Strategic Petroleum Reserve on Tuesday in a bid to curb price spikes in the international price caused by Russia's war on Ukraine.

The release is half of the 60 million barrels being freed up in coordinated action between the US and its international partners, including the International Energy Agency (IEA).

The White House emphasized that the release is an "initial" tranche intended to mitigate ongoing price fluctuations.

"IEA Member states also agreed to continue monitoring markets and consider further releases as necessary," spokeswoman Jen Psaki said in a statement.

"We are prepared to use every tool available to us to limit disruption to global energy supply as a result of President (Vladimir) Putin’s actions. We will also continue our efforts to accelerate diversification of energy supplies away from Russia and to secure the world from Moscow’s weaponization of oil and gas," she added, referring to the Russian president.

The joint announcement of the release of the oil, or 4% of IEA members' emergency stockpiles of 1.5 billion barrels, is equivalent to 2 million barrels a day for 30 days.

The coordinated dispersal is the fourth in the history of the IEA since its formation in 1974. Previous collective action was taken in 2011, 2005, and 1991.

Russia is the third-largest oil producer globally and the largest exporter worldwide, making it a pivotal player in global energy markets.

It exports approximately 5 million barrels of crude oil a day, representing roughly 12% of global trade. The average of 2.85 million barrels a day of petroleum products it supplies represents around 15% of the global refined product trade.

Around 60% of Russia's oil exports go to Europe and another 20% to China.