The United States and five other world powers announced a coordinated effort to tap into their national oil stockpiles on Tuesday, attempting to drive down rising gas prices that have angered consumers around the world.
The move appeared to underwhelm oil traders, who had been expecting President Biden to announce a larger release from America’s Strategic Petroleum Reserve, which is the biggest in the world with 620 million barrels. The price of a barrel of crude oil actually rose after the announcement in global trading, although administration officials said prices could fall in coming weeks.
The market reaction underscored the difficulties Mr. Biden faces, both politically and economically, in his efforts to react to the fastest increase in U.S. inflation in three decades. The president has seen his approval ratings slump as gas and food prices have risen, while Republicans have launched a steady series of attacks blaming Democrats.
Mr. Biden has shifted his messaging on the issue in recent weeks, in hopes of showing consumers he understands their financial pain. On Tuesday at the White House, he cast the release of oil from the strategic reserve as an important step toward lowering fuel costs for drivers at the start of the holiday travel season.
“Today we’re launching a major effort to moderate the price of oil, an effort that will span the globe and ultimately reach your corner gas station, God willing,” Mr. Biden said.
“While our combined actions will not solve the problem with high gas prices overnight, they will make a difference,” he said. “It will take time, but before long you should see the price of gas drop where you fill up your tank.”
Earlier on Tuesday, administration officials said Mr. Biden had ordered the Energy Department to tap into 50 million barrels of crude in the Strategic Petroleum Reserve. Traders had been expecting 100 million barrels, said Richard Bronze, head of geopolitics at Energy Aspects, a market research firm in London.
Britain said it would authorize the release of up to 1.5 million barrels and India said it would release five million. Mr. Bronze estimated that Japan and South Korea would each add four million to five million barrels. China did not announce details of its plans.
The concerted effort, the largest ever for a release of strategic reserves across multiple countries, is meant to address fluctuations in supply and demand for oil, administration officials said. And it was a shot across the bow of OPEC Plus, the name for the Organization of the Petroleum Exporting Countries as well as Russia and other countries. Mr. Biden has pushed those countries to increase production, but has been rebuffed.
The move could bring a response next week when the group holds its monthly meeting. While it could prompt those countries to increase production, it could just as easily push the cartel to restrict supply further and push global prices higher.
In recent monthly meetings, OPEC Plus has stuck with plans to increase production by a relatively modest 400,000 barrels a day each month. U.S. officials sidestepped a question about possible retaliation from OPEC Plus. The officials said they had pushed oil producers to announce their own supply increases for weeks and made clear to those nations that Mr. Biden and other world leaders were considering emergency releases of their own. They said Mr. Biden would have preferred a parallel release that included more oil-producing countries.
The price of oil has fallen since late October partly in anticipation that countries would take action to try to tame energy costs. The U.S. benchmark, West Texas Intermediate, immediately jumped after the administration’s announcement, and was trading 1.3 percent higher for the day. So far this month, the price had dropped 4.75 percent.
Demand for oil fell precipitously in the early months of the pandemic, so oil-producing nations cut output. In the United States, reduced demand led to a substantial decline in drilling; the country’s number of active oil rigs was down nearly 70 percent in summer 2020.
As prices rose in recent months, Mr. Biden looked for ways to show he was trying to tame prices, including asking the Federal Trade Commission to investigate possible illegal conduct by large oil companies in the national gasoline market. The president has pushed oil producers to ramp up supply even as he urges the U.S. and other countries to wean themselves from fossil fuels over the long term to…