US President Joe Biden announced on Tuesday that the United States will release 50 million barrels of oil from its Strategic Petroleum Reserve from next month to curb the fast rise of gasoline price at home.
But given that the US consumes more than 20 million barrels of oil a day, the move, which it says is part of a coordinated effort with other major energy-consuming nations, will do little to reduce the demand-supply gap in the US.
It is the US' own quantitative easing policies that are the root cause of the soaring oil prices, as they have prompted the major oil producers to control their supplies with the purpose of further maximizing their profits, forming a vicious cycle. So the move represents a desperate attempt of the Biden administration to address a problem of the US' own making
Calling on the other countries－Japan, the Republic of Korea, India, the United Kingdom and China－to do the same thing is just a way to make the self-made disaster a collective consequence.
Yet, these countries' replies have been lukewarm at best. Both Japan and the ROK are beating about the bush without promising anything. The UK said it will allow companies to "voluntarily release" oil reserves of up to 1.5 million barrels. Although India has agreed to release 5 million barrels, it stressed that the release is to be timed in agreement with the other five nations, and that does not exist.
Although to check the fast-rising price of oil is in line with China's economic interests, and this might also be an opportunity to ease the Sino-US tensions, it has to think about whether it is worthwhile to use its strategic petroleum reserve to respond to the appeal of the US to fulfill a mission impossible－especially after knowing that the US side has simply set the stage for it to make the offer and has shown no intention of easing the pressure it is putting on China in a bid to contain it.
The objective of the Biden administration is to try and iron out the inflation curve before the 2022 mid-term elections. Although it brags that the US economy is the only major economy recovering to its pre-pandemic level, it cannot afford to ignore the costs behind the rosy figures that may burst the bubble at any time.
Thanks to its addiction to printing bank notes and faith in borrowed prosperity, inflation in the US, which hit a 31-year high last month when consumer price index soared 6.2 percent year-on-year, the biggest 12-month jump since 1990, seems to be out of control and ready to extend into the foreseeable future. The soaring prices raise living costs, dilute savings, eat into industrial interest margins and hollow out the employment market.
That explains why Biden's call has met with de facto cold shoulders even among the US allies, as none of the countries is willing to bet its oil reserves and credit on the US administration. Rather than showing its ability to manage its economy and lead the world, the desperate call only testifies to the opposite.