US weighs largest ever draw from emergency oil reserve

WASHINGTON (Reuters) — The Biden administration is considering releasing up to 180 million barrels of oil over several months from the Strategic Petroleum Reserve (SPR), four U.S. sources said on Wednesday, as the White House tries to lower fuel prices.

The International Energy Agency (IEA) member countries are set to meet on Friday at 1200 GMT to decide on a collective oil release, a spokesperson for the New Zealand energy minister said in an email on Thursday.

“The amount of the potential collective release has not been decided,” the spokesperson for minister Megan Woods added. “That meeting will set a total volume, and per country allocations will follow,” she said.

It is unclear if the U.S. SPR draw would be part of a wider global coordinated release.

The IEA did not respond to a request for comment outside office hours. President Joe Biden will deliver remarks on Thursday on his administration’s actions, the White House said.

The latest amount of U.S. oil release being considered, which is equivalent to about two days of global demand, would mark the third time the United States has tapped its strategic reserves in the past six months, and would be the largest release in the near 50-year history of the SPR.

Global oil prices plunged more than $5 a barrel on the news.

Oil prices have surged since Russia invaded Ukraine in late February and the United States and allies responded with hefty sanctions on Russia, the second-largest exporter of crude.

Brent crude, the world benchmark, soared to about $139 earlier this month, highest since 2008, but slipped under $108 a barrel in Asian trading on Thursday.

Russia is one of the top producers of oil, contributing about 10 percent to the global market. But sanctions and buyer reluctance to purchase Russian oil could remove about 3 million barrels per day (bpd) of Russian oil from the market starting in April, the IEA has said.

Russia exports 4 to 5 million bpd. The news comes just before the Organization of the Petroleum Exporting Countries and its allies, an oil producer group known as OPEC+ that includes Saudi Arabia and Russia, meets to discuss reducing supply curbs. The United States, Britain and others have previously urged OPEC+ to quickly boost output.

However, OPEC+ is not expected to veer from its plan to keep boosting output gradually when it meets Thursday.