“The effect on prices will likely be short-term,” David Goldwyn, who was a senior State Department official in the Obama administration, said of Mr. Biden’s announcement. “But part of the benefit of this release is that it will provide a gateway to new physical supply coming online in the second half of this year from the United States, Canada, Brazil and other countries.”
Some environmentalists have criticized the release of the reserve. “Putting more oil on the market is not the solution to our problem but the perpetuation of our problem,” said Mark Brownstein, senior vice president of the Environmental Defense Fund.
But Meghan L. O’Sullivan, director of the Geopolitics of Energy Project at Harvard’s Kennedy School, said releasing more oil to ease shortages would not jeopardize the transition to clean energy. “What the past month has taught us is that if there is no energy security today, the appetite to take tough steps on the path to transition will evaporate,” he said. she declared.
Liberation is not without risk. Goldman Sachs analysts wrote in a research note that a large spill could cause “congestion” on the Gulf Coast, preventing new oil production from West Texas fields from entering pipelines and storage tanks.
Mr. Biden’s decision could also discourage Saudi Arabia and other global producers from increasing supply to reduce prices. OPEC Plus, a group led by Saudi Arabia and including Russia, decided on Thursday to maintain a policy of modest production increases.
Bob McNally, who was President George W. Bush’s energy adviser, said the statement was “not significant enough to offset the potential loss of Russian oil exports if the conflict and sanctions pressure continues to spread.” “.
The oil market tends to go in cycles, so the release can be an opportunity for the government to sell high and later buy low, potentially bringing in billions of dollars for the Treasury. The government will use this money to buy oil to fill the reserve, which in turn could help push prices up again.