US President Joe Biden’s advisor for infrastructure and energy security said that the United States released crude oil from its strategic petroleum reserves to address the “latent crisis” and not the fluctuations in global energy prices.
Amos Hochstein, the US Special Presidential Coordinator for Global Infrastructure and Energy Security, explained during a session at the Global Energy Forum of the Atlantic Council in Abu Dhabi, today, Saturday, that the United States did not use the oil reserves due to price fluctuations, saying: “We used the Strategic Petroleum Reserve as a result of A crisis caused the price difference, and there is a big difference.”
Hochstein said, in the events that are held within the Abu Dhabi Sustainability Week in the UAE, that the strategic petroleum reserve was last used when nearly two million barrels left the market during the night during the Libyan war.
180 million barrels of oil were released from US emergency reserves over the past year, after Russia’s invasion of Ukraine, sending Brent crude near a 14-year high of $140 a barrel.
Cancellation of oil reserve issues
And the US Department of Energy said last month that it would replenish the reserves, starting with the purchase of three million barrels of crude, and Hochstein stated that they had worked with Congress and canceled the mandatory shale oil reserve issues from 2024 to 2027, describing that as a large amount of oil that the market was expecting to be released.
Reserve use in case of a crisis
At the same time, he added, they will continue to use the oil reserves, in the event of a crisis or crisis that will affect consumers in the United States and around the world.
The US Congress had imposed, in previous laws, the sale of about 147 million barrels of oil from the fiscal year 2024 to 2027.
Oil prices rose by about 9 percent last week, amid hopes for a recovery in fuel demand in China, the world’s second largest economy and largest importer of crude.
Hochstein stressed that there must be a willingness to go up in prices and determine the extent of the response, and that “we must prepare for the reversal if prices fall to a lower level and how” we can be opportunistic in the market, “this will be a really smooth dynamic.”
Windfall profits tax
The US energy envoy said that a windfall tax on US oil companies, which have benefited largely from high energy prices, is “off the table” for the time being, as politicians in the United Kingdom and Europe agreed to impose windfall taxes after it recorded International oil companies made record profits last year.
A series of tax incentives
Last year, the United States passed the Reducing Inflation Act, which offers a series of tax incentives on wind, solar, hydroelectric and other renewable energy sources as well as a push toward electric vehicle ownership.
Hochstein noted that the Inflation Reduction Act is driving investment from around the world and within the United States, and urged other countries to “follow its example” and provide incentives for their clean energy sector, saying: We need to stimulate investment because it will not happen alone, and he said that the markets It will not deal with it and investments in transforming global energy systems will not happen, “We have to create government spending, and send a signal to the market that we are willing to make a small dollar investment that will boost large dollar investments.”
He stressed the importance of clean energy investments in developing and middle-income countries for a “just energy transition,” as he said that financial institutions, the private sector, and governments around the world are investing “billions and trillions of dollars in commitments and pledges to invest in the energy transition. These funds are in the OECD group and in developed countries.
“If you want to fight climate change, it cannot be done in one group of countries and not in another,” he added.
The White House said they would also seek to “bridge the gap between developed and developing countries in clean energy investment and deployment to ensure that global efforts to reduce emissions do not falter.”
