The White House is preparing to offload oil from its strategic reserves in a late bid to dampen fuel prices and ease the cost of living ahead of the mid-term elections.
The sale would market the remaining 14m barrels from President Joe Biden’s previously announced, and largest ever, release from the reserve of 180m barrels that started in May, according to news agency Reuters.
The administration has also spoken with oil companies about selling an additional 26m barrels from a congressionally mandated sale in the fiscal year of 2023.
The Department of Energy will also release further details on eventually buying the oil back.
This reflects the White House’s ambition to tackle rising pump prices while supporting domestic drillers.
Rising retail gasoline prices have powered inflation to the highest rate in decades – which has climbed to 8.2 per cent.
Average gasoline prices hit an average of $3.89 a gallon on Monday, up about 20 cents from a month ago and 56 cents higher than last year at this time, according to the AAA motor group.
Gasoline prices hit a record average above $5.00 in June.
This is posing a risk to Biden and the Democrat Party ahead of the November midterm elections, in which they are seeking to keep control of both the House of Representatives and the Senate.
Biden is also reconsidering the US relationship with Saudi Arabia, after the OPEC leader pushed the cartel’s plans to cut 2m barrels per day from next month.
Currently, oil prices remain weighed down by fears of a global recession and reduced demand from key markets such as China.
WTI Crude and Brent Crude are both nearly down three per cent for the day, trading $82.40 per barrel and $89.15 per barrel respectively on Tuesday evening.