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With BBC News Hindi

Updated: Thursday, November 25, 2021, 14:38 [IST]

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 <div class="big_center_img" data-cl-cnt="0" data-cnt-t="0" data-gal-src="https://hindi.oneindia.com/img/bbc/2021/11/_121788333_gettyimages-1355155631.jpg"> <div> <figure><img src="https://hindi.oneindia.com/img/bbc/2021/11/_121788333_gettyimages-1355155631.jpg" class="image_listical c1" alt="Joe Biden" title="Joe Biden" data-cl-slideshow="" data-cl-title = "Joe Biden" data-cl-description = "" data-cl-imageid = "650231-0""/> <p>Getty Images</p> </figure> </div> <p>Joe Biden</p> </div>  <p>The United States announced on Tuesday that it would release 50 million barrels of crude oil from its "strategic reserves" to reduce petrol prices, a move that would bring relief to the American people.</p>  <p>This concrete step was not limited to the United States.  The Biden government has managed to persuade other major economies, such as China, Japan, Britain, India and South Korea, to do the same.  Apparently, this helped to increase the supply of oil in the market.</p>   <p>Over the past year and a half, an agreement has been reached between the Organization of the Petroleum Exporting Countries (OPEC) and Russia (collectively, OPEC Plus).  Through it, its production was also reduced after a sharp drop in price due to declining demand for oil due to the corona.</p> <p>These big crude oil producers are trying to control the market to push up its prices.</p> <p>The United States has sought to persuade OPEC members to speed up oil production after Corona's influence waned.  But these countries say they will increase their production slowly and in limited quantities.</p>  <p>According to analysts, the decision taken by the US government to deal with such a situation is unprecedented.  In their opinion, trying to lower prices through strategic reserves could increase tensions between the United States and OPEC.</p>    <div class="big_center_img" data-cl-cnt="1" data-cnt-t="1" data-gal-src="https://hindi.oneindia.com/img/bbc/2021/11/_121788331_gettyimages-768823.jpg"> <div> <figure><img src="https://hindi.oneindia.com/img/bbc/2021/11/_121788331_gettyimages-768823.jpg" class="image_listical c1" alt="Strategic reserves of US crude oil" title="Strategic reserves of US crude oil" data-cl-slideshow="" data-cl-title = "US Strategic Reserves for Crude Oil" data-cl-description = "" data-cl-imageid = "650231-1""/> <p>Getty Images</p> </figure> </div> <p>Strategic reserves of US crude oil</p> </div>  <h3>Emergency reserves of oil</h3> <p>The United States created its Strategic Petroleum Reserve (SPR) in 1975, two years after the Arab-Israeli war.  In fact, Arab countries, angry with the West for supporting Israel in the Yom Kippur War, had banned the sale of oil to the West.  This led to an economic crisis.</p> <p>As a result, the price of crude oil had quadrupled by 1974 and there was a shortage of oil in the United States.</p> <p>At the same time, the United States decided to establish strategic reserves of crude oil to protect itself from the instability of the world oil market and supply disruptions.</p> <p>Since then, other major crude oil consumers have done the same.  But America's strategic reserves are the largest in the world.  At present, its capacity is about 62 million barrels.  It is built in a number of caves excavated between Baton Rouge (Louisiana) and Freeport (Texas).</p> <p>The United States has already resorted to this emergency reserve several times.  He did so during the 1991 Gulf War or the 2005 Hurricane Katrina.</p> <p>In other crises, the United States "supplied" many of its refineries with crude oil until the situation returned to normal.  This happened when the supply of crude oil was affected for some reason.  However, this is not the case at the moment.</p> <p>Rad al-Qadri, managing director of energy, climate and resources at Eurasia Group Consultancy, told the BBC: "This is a very unusual move. The IAEA did so in 2011, when Libya's oil exports came to a halt after the end of Gaddafi's rule.</p> <p>Al-Qadri says the United States is using these resources at the same time.  The United States has recently pumped a small amount of oil from SPR.  He always did this when the oil supply was interrupted.  He has never extracted so much oil to reduce the price.</p>   <div class="big_center_img" data-cl-cnt="2" data-cnt-t="2" data-gal-src="https://hindi.oneindia.com/img/bbc/2021/11/_121788330_gettyimages-1236752048.jpg"> <div> <figure><img src="https://hindi.oneindia.com/img/bbc/2021/11/_121788330_gettyimages-1236752048.jpg" class="image_listical c1" alt="Gasoline prices have risen sharply in the United States in recent months." title="Gasoline prices have risen sharply in the United States in recent months." data-cl-slideshow="" data-cl-title = "Petrol prices have risen sharply in the United States over the past few months."  data-cl-description = "" data-cl-imageid = "650231-2""/> <p>Getty Images</p> </figure> </div> <p>Gasoline prices have risen sharply in the United States in recent months.</p> </div> <h3>Trying to reduce inflation</h3> <p>Al-Qadri also said that the United States had not taken such a step in 2008, when oil prices had reached a historic high of about 150 150 a barrel.  Oil is currently priced at just over 80 80 a barrel.</p>  <p>But the Biden administration is looking at other figures.  In a statement, the White House said, "American consumers are feeling the effects of higher oil prices on their domestic heating bills and gas station businesses, as oil supplies often fail to meet growing demand in the aftermath of an epidemic." Is. "</p> <p>The average price of petrol in the US this Tuesday was US $ 3.40 per gallon.  Thus, its price has gone up by 62 per cent in the last one year.  It was priced at just 2.11 a year ago.  In a country like the United States, where oil is the main source of energy, it matters a lot.  Oil supplies about 35 percent of the total energy needs of the United States.</p> <p>If we add the supply disruptions caused by the epidemic, inflation has risen by 6.2 per cent since October last year.  This is the highest inflation rate in 30 years.</p>  <p>Biden said in a statement from the White House on Tuesday that "today we are going to take a big step to reduce oil prices. This is an effort that will spread around the world. It will give you access to gas stations." . "</p>   <div class="big_center_img" data-cl-cnt="3" data-cnt-t="3" data-gal-src="https://hindi.oneindia.com/img/bbc/2021/11/_121788332_gettyimages-155367095.jpg"> <div> <figure><img src="https://hindi.oneindia.com/img/bbc/2021/11/_121788332_gettyimages-155367095.jpg" class="image_listical c1" alt="Petrol shortages in the United States began in 1974 due to Arab sanctions." title="Petrol shortages in the United States began in 1974 due to Arab sanctions." data-cl-slideshow="" data-cl-title = "Petrol shortages in the United States in 1974 due to Arab sanctions."  data-cl-description = "" data-cl-imageid = "650231-3""/> <p>Getty Images</p> </figure> </div> <p>Petrol shortages in the United States began in 1974 due to Arab sanctions.</p> </div> <h3>Biden's decision is also a political signal</h3> <p>If the extraction of crude oil from the US strategic reserves is an extraordinary step, it becomes even more extraordinary that it is being carried out with the cooperation of many countries.  This has not happened since the end of Gaddafi's rule in Libya in 2011.</p> <p>However, it is unclear whether the initiative will lead to a significant reduction in oil prices, or if so, how long it will last.</p>  <p>In fact, Brent crude (Europe's standard crude oil price) and WTI (US standard rate) prices rose on Tuesday rather than fall.</p> <p>Analysts believe that the market was already expecting the US to announce withdrawal of oil from its strategic reserves.</p> <p>Well, the real impact of this move will depend on two things.  The first is how oil is released into the market and the second is how OPEC Plus countries react to it.</p>  <p>Al-Qadiri says: "The real question of time is when and how quickly these oils will be able to enter the market. But as such. The plan has been implemented. It will take months to form. And it is not yet clear how much oil the government will be able to release immediately. "</p>  <p>However he acknowledged that their numbers were not enough to defeat Biden's government.  "Instead of lowering oil prices, the government is trying to show that it is doing its best to reduce inflation," he said.</p> <p>This can be understood by trying to connect the United States with other countries.  In fact, the Biden government is trying to build its image by taking this initiative in such a way that it is also trying to bring down oil prices internationally.</p> <p>Al-Qadri says other countries are also struggling with inflation, but he is coming with the United States to make their relations better.  He says China has already used its strategic reserves.  This was done to deal with inflation and other problems.  But now, if he is coming with the US, it is because he wants to reduce his tension.</p>  <p>However, the contribution of many countries taking the initiative with the United States will be much less.  For example, the UK will release only 1.5 million barrels of its reserves, while Japan will release only 42 million barrels.</p>   <div class="big_center_img" data-cl-cnt="4" data-cnt-t="4" data-gal-src="https://hindi.oneindia.com/img/bbc/2021/11/_121788336_gettyimages-1153299180.jpg"> <div> <figure><img src="https://hindi.oneindia.com/img/bbc/2021/11/_121788336_gettyimages-1153299180.jpg" class="image_listical c1" alt="OPEC Plus" title="OPEC Plus" data-cl-slideshow="" data-cl-title = "OPAC Plus" data-cl-description = "" data-cl-imageid = "650231-4""/> <p>Getty Images</p> </figure> </div> <p>OPEC Plus</p> </div> <h3>The ball is now in OPEC + countries' court.</h3> <p>Biden's latest initiative could lead to tensions with OPEC Plus countries.  OPEC Plus had earlier warned the United States that the move was "unnecessary".  He said that if the big consumers of crude oil use their strategic reserves then their member countries would also take action.</p> <p>Many analysts, such as Peter Flynn of Chicago-based advisory firm Price Futures, agree that such initiatives do not generally work.</p>  <p>"History shows that the withdrawal of crude oil from the SPR will only have a short-term effect. And the move is an open declaration of an oil war with OPEC Plus," he told Reuters news agency.</p> <p>In April 2020, OPEC Plus member states signed an agreement.  Under this, they will have to gradually increase the supply of crude oil in the market.  According to this, the supply of oil can only increase by 4 lakh barrels per month.</p> <p>However, this increase will not happen automatically.  This can only happen when, after evaluating the growth, the governments put their stamp on it.</p> <p>Al-Qadri says, "It is designed to be a tool to manage the market every month."  He believes that when supply is low, prices should go up, but not too much.</p> <p>He says OPEC Plus countries are worried that surplus supplies will push up oil reserves next year.  By the way, OPEC + countries will meet again early next month to decide whether to increase production by pre-determined.  If OPEC Plus does not decide to increase production, Biden's initiative will help stem the fall in crude oil prices.</p>  <p>"The ball is now in OPEC Plus' court," said Qadri.</p>  <p><strong>(You for BBC Hindi's Android app</strong> <a href="https://play.google.com/store/apps/details?id=uk.co.bbc.hindi" rel="nofollow">Click here</a> <strong>Can do  You tell us</strong> <a href="https://www.facebook.com/bbchindi/" rel="nofollow">Facebook</a> <strong>And</strong> <a href="https://twitter.com/BBCHindi" rel="nofollow">Twitter</a> <strong>You can follow too.)</strong></p> <noscript><img src="https://a1.api.bbc.co.uk/hit.xiti/?s=598346&p=hindi.international.story.59407608.page&x1=%5Burn%3Abbc%3Acps%3Ad59f96ae-3706-47d7-bbb7-abd65ecbb6ab%5D&x4=%5Bhi%5D&x5=%5Bhttps%3A%2F%2Fwww.bbc.com%2Fhindi%2Finternational-59407608%5D&x7=%5Barticle%5D&x8=%5Bsynd_nojs_ISAPI%5D&x9=%5B%E0%A4%A4%E0%A5%87%E0%A4%B2+%E0%A4%B8%E0%A4%B8%E0%A5%8D%E0%A4%A4%E0%A4%BE+%E0%A4%95%E0%A4%B0%E0%A4%A8%E0%A5%87+%E0%A4%95%E0%A5%87+%E0%A4%85%E0%A4%AE%E0%A5%87%E0%A4%B0%E0%A4%BF%E0%A4%95%E0%A5%80+%E0%A4%AB%E0%A4%BC%E0%A5%88%E0%A4%B8%E0%A4%B2%E0%A5%87+%E0%A4%B8%E0%A5%87+%E0%A4%B9%E0%A5%8B+%E0%A4%B8%E0%A4%95%E0%A4%A4%E0%A4%BE+%E0%A4%B9%E0%A5%88+%E0%A4%93%E0%A4%AA%E0%A5%87%E0%A4%95+%E0%A4%B8%E0%A5%87+%E0%A4%9F%E0%A4%95%E0%A4%B0%E0%A4%BE%E0%A4%B5%3B+%E0%A4%AD%E0%A4%BE%E0%A4%B0%E0%A4%A4%2C+%E0%A4%9A%E0%A5%80%E0%A4%A8+%E0%A4%95%E0%A5%8B+%E0%A4%AD%E0%A5%80+%E0%A4%AC%E0%A4%BE%E0%A4%87%E0%A4%A1%E0%A4%A8+%E0%A4%A8%E0%A5%87+%E0%A4%95%E0%A4%BF%E0%A4%AF%E0%A4%BE+%E0%A4%B0%E0%A4%BE%E0%A4%9C%E0%A4%BC%E0%A5%80%5D&x11=%5B2021-11-25T04%3A46%3A32Z%5D&x12=%5B2021-11-25T04%3A46%3A32Z%5D&x19=%5Boneindia.com%5D"/></noscript> <div style="padding-bottom:7px;background: #cd1000;height: 15px; margin-bottom: 10px;width: 97%;clear:both;"><a href="http://www.bbchindi.com" rel="nofollow noopener" target="_blank"><img src="https://hindi.oneindia.com/images/bbc-footer.png" border="0" alt="BBC Hindi" height="11" width="660"/></a></div>      <div class="notification-outerblock clearfix" id="notification-articleblock" style="display:none;"> <p>

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