Oil prices surged another USD 5 per barrel on Wednesday, for the first time since 2014 after an agreement by the United States and other major governments to release supplies from strategic stockpiles failed to calm market anxiety over Russia’s attack on Ukraine.

Benchmark U.S. crude rose USD 5.24 per barrel to USD 108.60 in electronic trading on the New York Mercantile Exchange. Brent crude, the international price standard, gained USD 5.43 to USD 110.40 per barrel in London.

The 31 members of the International Energy Agency, the club of major oil consumers, agreed Tuesday to release 60 million barrels of crude from stockpiles in hopes of calming markets.

That failed to calm concern about disruption in supplies from Russia, the second-biggest exporter behind Saudi Arabia.

“Markets dismissed the notion that 60 million barrels of strategic reserves released will be consequential to the risks of Russian supply jeopardized,” Tan Boon Heng of Mizuho Bank said in a report. “Russia pumps more than that in just six days.” 

Biden announces release of 30 mn barrels of oil to maintain global oil prices

US President Joe Biden announced that his administration has worked with 30 other countries to release millions of barrels of oil from American strategic reserves to maintain the global oil prices in the midst of a Russian invasion of Ukraine. In his maiden State of the Union Address on Tuesday, Biden said his administration was taking “robust action” to make sure the pain of the US sanctions is targeted at Russia’s economy.

“To all Americans, I will be honest with you, as I’ve always promised. A Russian dictator, invading a foreign country, has costs around the world,” Biden said.

“Tonight, I can announce that the United States has worked with 30 other countries to release 60 million barrels of oil from reserves around the world. America will lead that effort, releasing 30 million barrels from our own Strategic Petroleum Reserve. And we stand ready to do more if necessary, unified with our allies,” Biden said.

“These steps will help blunt gas prices here at home. And I know the news about what’s happening can seem alarming. But I want you to know that we are going to be okay,” he said, assuring his countrymen that he would ensure that inflation remains under control.

Biden said that he is the only president ever to cut the deficit by more than one trillion dollars in a single year.

“Lowering your costs also means demanding more competition. I’m a capitalist, but capitalism without competition isn’t capitalism. It’s exploitation—and it drives up prices,” he said.

“When corporations don’t have to compete, their profits go up, your prices go up, and small businesses and family farmers and ranchers go under. We see it happening with ocean carriers moving goods in and out of America.

During the pandemic, these foreign-owned companies raised prices by as much as 1,000% and made record profits,” he added.

(With agencies inputs)

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