According to a Biden administration source familiar with the matter, the United States is set to announce a loan of crude oil from its emergency reserve on Tuesday as part of a plan to thrash out with big Asian energy consumers to cut energy costs. The initiative aims to bring down rising energy costs after OPEC and its allies turned down repeated demands from Washington and other consumption countries to pump more swiftly to keep up with surging demand.
Due to rising prices for fuel and other consumer goods in the aftermath of the coronavirus outbreak, US President Joe Biden's approval ratings are poor, posing a threat to him and his Democratic party ahead of next year's congressional elections. A "swap" from the US Strategic Petroleum Reserve (SPR) will be disclosed on Tuesday, according to the source, in a move coordinated with numerous countries. The amount of oil that would be released from the stocks was not specified by the source.
Biden has already requested that China, India, South Korea, and Japan release strategic oil supplies in coordination with the US. According to Reuters, Japanese and Indian officials are working on ways to accomplish this. The unprecedented effort by the United States to work with big Asian economies to cut energy prices is meant to serve as a reminder to major producers that they should pump more oil to satisfy concerns about high gasoline prices in the world's most powerful economies.