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The release of the strategic petroleum reserve will reduce oil prices in the market.

The release of SPR is viewed as a short-term solution. The price varies and cannot be predicted due to many underlying factors.

The United States Department of Energy maintains the Strategic Petroleum Reserve(SPR), an emergency stockpile of petroleum. In early 2021, global oil prices were at a record high due to supply shortages and several other factors. Following this, U.S. President Joe Biden requested that The Organization of the Petroleum Exporting Countries and allied producers (OPEC+) increase oil production to control gasoline prices. OPEC did not attend to the White House's request. As a result, Biden announced the release of oil from the Strategic Petroleum Reserve. Biden also requested other countries to coordinate and release oil reserves to reduce global oil prices. In 2011, a similar situation took place. The International Energy Agency(IEA) coordinated the release of 60 million barrels of emergency oil stocks to stabilize the situation in Libya due to civil unrest. The announcement by the IEA had resulted in a decline in crude prices. The IEA "estimates put June OPEC crude production at 30.03 mb/d, a rise of 840 kb/d from May, and a possible further rise of 150 – 200 kb/d in July." Further, the "higher OPEC production and the Libya Collective Action should substantially cover the expected 1.3 mb/d increase in the 3Q11' call on OPEC crude and stock change." The action had seen a positive response, and there was a reduction in prices. IEA expressed a decline in the global oil demand in 2020 due to the COVID-19 crisis. It predicted this could lead to price hikes and crunch in countries and a difficult period for oil-producing companies. Prices fell below $80 per barrel after the U.S. crude and global benchmark Brent dropped, following Biden's announcement of coordinated stockpile release. On November 17, the per barrel rate for Brent fell to its lowest rate since October 1, Reuters reported. Tony Headrick, an energy analyst at CHS Hedging, said this signaled "a movement towards balance which we've not seen for many months." Louise Dickson, a senior oil markets analyst at Rystad Energy, said, "The impact would likely be mild and short-lived, according to past historical examples of sales." Dickson related that the "size of the effect on markets would also depend on how large the release is," reported NPR. The New York Times said that Dickson explained, "A release of SPR volumes, which are mostly held in crude oil and not oil products like gasoline, would offer a reprieve to gasoline price." The decline in the previous prices has other reasons, such as the dollar rate, making it easy to buy a barrel. The American shale oil producers are expected to get "more supplies on the market in the coming months." According to Goldman Sachs, a coordinated release would only "provide a short-term fix to a structural deficit" in the oil market, CNN reported. Wall Street bank argues that the release is "fully priced in" (meaning the market impact has already occurred.) CNN also reported the experts' reasoning that due to the "underlying supply-demand mismatch," reserves usage is not a long-term solution. However, administration officials have stressed that the system has previously helped other countries to lower oil prices. On November 23, 2021, Biden announced the release of "50 million barrels of oil from the Strategic Petroleum Reserve to lower prices for Americans and address the mismatch between demand exiting the pandemic and supply." The "release will be taken in parallel with other major energy-consuming nations including China, India, Japan, Republic of Korea and the United Kingdom," added Biden. Though the U.S. and other countries planned to release crude oil reserves to reverse the oil prices in the market, experts believe that oil's downward trend is temporary and won't last for the long term. The oil stockpile draw might increase the oil production supply. Moreover, the amount of release is proportional to the size of the market. The variation in oil prices cannot be explicitly predicted as various elements sabotage the trend. CORRECTION: This fact check previously stated that there was around an 80 percent reduction in prices per barrel of U.S. crude and global benchmark Brent. This was wrong. Instead, prices fell below $80 per barrel.

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