The United Kingdom is set to join the United States in the latest round of releases from strategic petroleum reserves as the Western allies and the International Energy Agency (IEA) seek to lower oil prices and ensure enough supply globally in the wake of the Russian war in Ukraine.
The UK announcement is expected as soon as on Friday via the IEA, which is meeting today to review and assess ideas about releases from strategic petroleum reserves, two sources with knowledge of the UK's plan told Bloomberg.
On Thursday, U.S. President Joe Biden announced the biggest ever release of oil from the U.S. Strategic Petroleum Reserve (SPR)-180 million barrels over six months.
"After consultation with allies and partners, the President will announce the largest release of oil reserves in history, putting one million additional barrels on the market per day on average - every day - for the next six months. The scale of this release is unprecedented: the world has never had a release of oil reserves at this 1 million per day rate for this length of time. This record release will provide a historic amount of supply to serve as bridge until the end of the year when domestic production ramps up," the White House said in a statement.
"President Biden is coordinating this action with allies and partners around the world, and other countries are expected to join in this action, bringing the total release to well over an average 1 million barrels per day," the White House added.
The SPR release could help the market rebalance in the short term, but it would not solve the longer-term deficit, Goldman Sachs said on Thursday, commenting on the massive SPR release.
"This would remain, however, a release of oil inventories, not a persistent source of supply for coming years. Such a release would therefore not resolve the structural supply deficit, years in the making," Goldman Sachs said in a Thursday research note carried by CNBC.
By Charles Kennedy for Oilprice.com
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