Joe Biden orders 'unprecedented' release of oil reserves

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US President Joe Biden has ordered a major release of oil from America's strategic reserves in an effort to bring down high fuel costs.

The release of up to 180m barrels of oil over six months is the largest since the reserve was created in 1974.

Oil prices dropped on reports of the move, which is aimed at easing a supply crunch sparked by war in Ukraine.

But the release - of about 1m barrels a day - is unlikely to fully resolve the energy crisis, analysts say.

Mr Biden promised further action to boost US output, saying the release would "serve as a bridge until the end of the year when domestic production ramps up".

He called for companies to pay extra if they choose not to use oil wells on land they lease from the government, as well as investments to speed up the adoption of greener energy sources.

News of the plans by the US came as the Organization of the Petroleum Exporting Countries (Opec) and its allies including Russia met on Thursday.

After just 12 minutes of deliberation, the group of major oil producing nations, which is known as Opec+, said it was sticking to its existing deal to gradually increase production.

"The consensus on the outlook pointed to a well-balanced market," the group said in a statement. "Current volatility is not caused by fundamentals, but by ongoing geopolitical developments."

The soaring cost of fuel has become a major political issue, including in the US, which hosts mid-term elections in November.

Mr Biden said the scale of the release from the Strategic Petroleum Reserve was "unprecedented". The US also accounted for half of the 60m barrels Western allies released from crude reserves in March.

Following Mr Biden's announcement, US oil benchmark West Texas Intermediate was about 4.7% lower at about $103 a barrel, while Brent Crude fell similarly to around $108.

But the release of additional reserves is unlikely to be enough to compensate for lost supplies from Russia - the world's second-biggest oil exporter after Saudi Arabia.

"While stock releases will help to keep a lid on prices in the short term, we think it will take an increase in global production to spark a sustained fall in prices," said Edward Gardner, commodities economist at Capital Economics.

Brent Crude hit $139 a barrel earlier this month after Russia's invasion of Ukraine and sanctions slapped on Moscow by the US and its allies.

Energy prices have fallen back since then, but Brent Crude is still almost 70% higher than it was a year ago.

Global energy supplies had been tightening for months as economies started to reopen as they relaxed pandemic lockdown measures.

That was made worse in recent weeks by expectations that Russian oil exports could fall by as much as 3m barrels a day.

Most other major energy producing nations are either at full capacity or are unwilling to increase output.

The US, which is the world's largest oil producer, is currently pumping out 11.7 million barrels of oil a day, but that is not enough to meet global demand.

Meanwhile, the International Energy Agency (IEA) has called an emergency meeting for Friday.

It is unclear whether other of the organisation's 31 members - which include nations such as the UK, France, Germany and Japan - will follow the US by releasing oil reserves.

Also on Thursday, Japan said that it would take emergency measures to secure supplies of seven strategic materials it relies on heavily from Russia or Ukraine as the war and sanctions cause disruptions to supplies.

The country's industry minister said the actions include government support to boost domestic production, alternative procurement and to help technological developments to reduce use of the materials, which include liquefied natural gas and gases used in computer chip-making.

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