After a republican opposition… will Biden complete the reserve withdrawal…

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The White House said on Tuesday, in a tweet via its Twitter account, that the withdrawal of quantities from the Strategic Oil Reserve contributed to lowering fuel prices in the United States of America, but Republicans are calling for restricting the withdrawal process.

The American “The Hill” website also indicated that House Republicans are expected to vote soon on a bill that would prevent the Energy Department from releasing oil from the country’s Strategic Petroleum Reserve (SPR) until the administration develops a plan to increase the percentage of federal land leased for oil production. and new gas.

The news, which was translated by “Arabic 21”, pointed out that US Energy Secretary Jennifer Granholm is resisting Republican moves seeking to set strict conditions for the withdrawal of the strategic oil reserve.

In her speech last Wednesday, the minister objected to the Republican proposal, stressing that “the proposed bill would significantly weaken the vital energy security tool, leading to more shortages of oil supplies in times of crisis and higher gasoline prices for Americans.”

Granholm said, “President Biden’s decision last year to release quantities of oil reserves contributed to lowering gasoline prices,” citing an analysis from the Treasury Department that indicated that withdrawing these quantities, in conjunction with similar moves from other countries, reduced the price of gasoline by between 17 and 42 percent. cents per gallon.

reserve volume

The US President had promised the citizens to work to reduce the price of gasoline, by seeking to push global oil producers to increase production so that the price of oil decreases globally, but his efforts were killed after OPEC decided to reduce production by 10 million barrels.

OPEC’s decision prompted the US president to resort to an alternative plan by withdrawing “selling” quantities of strategic reserves, according to a comprehensive program that included withdrawing 180 million barrels in 2022, especially in light of the rise in energy prices due to OPEC’s production cut and the Russian-Ukrainian war.

He also laid out a plan to withdraw 80 million barrels in 2023, in return, Republicans may introduce this week a bill restricting withdrawals from the strategic reserve.

According to the US Energy Information Administration website, the reserves reached 398.6 million barrels in October 2022. In contrast, in January of the same year, it was 588.3 million barrels, while in January 2021, it was 638 million barrels, and it is considered This significant decline is almost the first since the 1980s.

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Can Biden resist the Republicans?

Nihad Ismail, an expert in oil and energy affairs, confirmed that “the strategic reserves are resorted to in times of wars, sieges and emergencies, and not to interfere in the market mechanism, as President Biden did.”

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Ismail pointed out that “the reserve stock rate in the nineties of the last century was 690-700 million barrels, but it fell in December 2022 and reached 372 million barrels.”

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Ismail added, in an exclusive interview with Arabi 21: “The release of 180 million barrels last year from the strategic reserve helped temporarily reduce the pace of rising fuel prices in the United States, but it is assumed that the reserve is not to reduce prices, because the main purpose of its use is in times of emergency.”

And about whether President Biden can implement his plans to withdraw 80 million barrels this year, the expert said: “He can implement this plan, but by an executive presidential order, although this is futile because fuel prices have fallen due to the drop in global prices.”

He explained, “The goal now in America is to rebuild stocks, raise the pace of imports, and reduce exports when prices drop to the range of 70-75 dollars, according to my information.”

It will not affect oil prices

For his part, international oil expert Mamdouh Salama said, “President Biden was planning to sell 26 million barrels of US Strategic Petroleum Reserve (SPR) in September 2023, and an additional 140 million barrels during a period extending from 2023 to 2027.”

He added, “But he may cancel the sale of 26 million barrels this year authorized by Congress after canceling previously planned sales of 140 million barrels of SPR crude from 2023 to 2027.”

Salama explained, during his interview with “Arabi 21”, that “the cancellation is due to the Biden administration responding to congressional legislation proposed by the Republicans, which aims to prevent the administration from selling oil from the Strategic Petroleum Reserve until US oil production increases on federal lands.”

Regarding the impact of withdrawing new quantities of US stocks or restricting them on the global oil market, Salameh said: “Whether the Republicans pass the law through which they want to restrict the withdrawal process, or whether the Biden administration vetoes it, this will not make a difference to global oil prices.” “.

He stressed that “the US Strategic Petroleum Reserve had no impact on the market or prices despite the addition of more than 180 million barrels of its stocks to supplies in the market, due to the narrow global oil market, the strong demand for oil, and the shrinking global reserve oil production capacity.” .

He continued: “Moreover, sooner or later, the Biden administration will have to return the oil withdrawn to the Strategic Petroleum Reserve, however, it will be practically impossible to achieve this goal, for two reasons, first because US shale oil production is a expendable power that is unable to increase production, and secondly, there is no oil reserves to buy in the current narrow global market.”

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