Crude oil prices had fallen hard during the Asian session and are currently gasping for a short recovery after hitting a low of $99.64 per barrel during the previous session. The bearish trend was set following the US government intervention to release up to 180 million barrels of oil from its strategic reserves to curb the general oil scarcity that has taken the price of oil as high as $131 per barrel last two weeks. So far, the oil scarcity has been brought about by the Russian dominance and near-monopoly in crude oil supply to the European nations and neighboring countries, including Asia.
Crude oil prices fell more than $9 during the early hours of the Asian session on Thursday. The United States revealed it is considering the release of up to 180 million barrels from its strategic petroleum reserve (SPR) over several months to calm soaring crude prices.
Oil supply across the globe has been drastically reduced for a long time following Moscow's Western sanctions for its violent actions in Ukraine. Russian oil supply abroad has dwindled and has shifted to other regions outside the EU.
Russia is undoubtedly the world's largest oil exporter and the second-largest crude exporter after Saudi Arabia. Hence, the sanctions placed on them have drastically impacted oil supply across the globe leading to current scarcity and skyrocketing prices.
According to existing records, Russian oil exports account for roughly 32 percent of the continent's total petroleum imports and 53 percent of Europe's oil product annual importations. To further curb the scarcity of crude oil created by the ongoing wars and sanctions placed on Russia, US president Biden will be giving some remarks today stating the plan targeted at lowering oil supply prices that have risen to highs since Russia invaded Ukraine.
Similarly, the International Energy Agency (IEA) will hold an emergency ministerial meeting tomorrow Friday to discuss oil supply to reduce oil prices further. There are currently mixed feelings on the impact the US government's release of this reserve oil will have on the market prices. Some consider it as likely to have only a temporary effect when the released amount is exhausted following the high demand for oil and its related products.