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US President Joe Biden went on the offensive Tuesday by announcing that his country was going to draw heavily on its strategic oil reserves in order to lower the price. He thus hopes to raise his popularity rating at half mast. Rarely, China has joined this initiative, as have India, Japan, South Korea and the United Kingdom.
Never had the United States drawn so much from its strategic oil reserves: Joe Biden announced Tuesday, November 23 a “major initiative” to lower the prices of black gold, and therefore of gasoline, hoping to finally convince Americans that he is the president of the middle class.
Before his compatriots hit the road for the very family-friendly Thanksgiving holiday, which falls on Thursday, the Democrat launched the initiative that has been buzzing the market for some time: he will put into circulation 50 million barrels taken from the strategic reserves of oil from the world’s largest power, the largest quantity ever drawn.
“We are launching a major initiative,” the US president said in a speech, against the backdrop of photographs of gas stations and tanks. The initiative “is not going to lower prices overnight” but it “will make a difference”, he promised from the White House.
Joe Biden also again accused the oil majors of being partly responsible for the high gas prices. “The price of gasoline on the wholesale market has fallen by around 10% in recent years, but the price at the pump has not budged a dime,” he said. “In other words, the gasoline supply companies pay less and earn a lot more,” he said, accusing the companies of “pocketing the difference” between wholesale and retail prices. “It is unacceptable,” added the US president.
Buried barrels
Usually, the United States touches sparingly on its reserves – currently 609 million barrels, making them the largest in the world – buried in Louisiana and Texas, in the event of natural disasters or international crises. However, Joe Biden not only uses it to correct prices, but he says he does so in coordination with other large consumers of black gold, which is unprecedented.
For the occasion, Washington and Beijing have put their rivalry aside: the United States has let it be known that China is joining this initiative, as has India, Japan, South Korea and the United Kingdom. , but without giving much details.
One of the tenors of the Republican camp, Senator Lindsey Graham, denounced in a press release an “abuse” of the use of these reserves, intended according to him for “emergencies.”
The subject is politically hot, especially for Joe Biden whose main objective is to make life easier for the middle class, discouraged in the face of globalization and the Covid-19 pandemic. Despite advances related to his infrastructure law and a growing labor market, Joe Biden is unpopular. According to the FiveThirtyEight site, which aggregates polls, its popularity rating was below 43% on Tuesday.
Psychological impact
Inflation, which is reaching peaks, is undoubtedly for something. And in particular the rise in prices at the pump, in a country where taking the car is as much a necessity, for lack of developed public transport, as a way of life.
The 50 million barrels reserve drawdown is symbolic – it only covers three days of demand from US refineries. Joe Biden hopes above all for a psychological impact, both on producing countries such as Saudi Arabia, which are reluctant to open the floodgates, and on his public opinion.
With AFP
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