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The US plans oil release after Ukraine-related surge in global crude oil prices

The Russian invasion of Ukraine has sent global crude oil prices to record highs, with the Brent price surging above US$105/bbl on 24 February 2022 for the first time since the summer 2014, and the US West Texas Intermediate (WTI) exceeding US$100/bbl. Since then, prices have eased, at around US$98/bbl for Brent and US$93/bbl for WTI.

The US administration has consequently announced that the United States was working with other countries on a combined release of crude oil from strategic crude reserves. Japan and Australia would follow the oil release movement. In November 2021, the United States decided to release 50 mbl of oil from the Strategic Petroleum Reserve (SPR) through exchanges (32 mbl) and sales (18 mbl), in an attempt to lower domestic oil prices, which had reached 7-year highs. In order to have a larger impact on global oil prices, the US oil release was coordinated with China, India, South Korea, Japan and the United Kingdom. The US SPR currently holds around 582 mbl of oil.

The Ukraine crisis also led to a more than 30% surge in gas prices in Europe (which imports 40% of its gas from Russia, mainly through Ukraine and Belarus), even if Russian gas deliveries to Europe remained uninterrupted. On 24 February, British and Dutch gas prices were 40-60% higher than the day before (gas price reached €140/MWh for the front-month contract TRNLTTFMc1 in the Dutch gas market), before declining on 25 February. Asian spot LNG prices also surged by more than 50%, following the jump in European gas prices.