US and allies agree to release 60 million barrels of oil from their reserves as Russian invasion of Ukraine causes price spike

By Phil Mattingly, Kevin Liptak, Kaitlan Collins and Natasha Bertrand, CNN

(CNN) -- The US and its allies have agreed to a release of 60 million barrels from their reserves, according to two sources familiar with the decision, as leaders seek to dampen the effect of Russia's invasion of Ukraine on gas prices at home.

Half of that total -- 30 million barrels -- will come from the US Strategic Petroleum Reserve, and the other half will come from allies in Europe and Asia. Those other allies include Germany, the United Kingdom, Italy, the Netherlands and other major European countries, as well as Japan and South Korea.

The invasion of Ukraine has driven concerns about a supply disruption from Russia, the world's No. 2 oil producer. Brent oil prices closed above $100 a barrel on Monday for the first time since 2014. US crude and Brent jumped another 5% on Tuesday even as the International Energy Agency meets to discuss a response to the Russia-Ukraine crisis.

High oil prices have lifted prices at the gas pump to seven-year highs. The national average for regular gasoline rose to $3.62 on Tuesday, up about 9 cents in a week and 24 cents in a month, according to AAA. At some point, energy prices could get so expensive that it erodes demand from consumers and slows the broader economy.

US officials have spent the last several weeks on calls and in meetings with counterpart key energy supplying countries in an effort to secure commitments to back-fill any market disruptions. The effort included an in-person visit to Saudi Arabia from two senior administration officials to discuss the need to address the effect on oil markets. The US informed Saudi Arabia ahead of the oil reserve announcement.

President Joe Biden signaled his intent to release the oil last week.

"We are actively working with countries around the world to evaluate a collective release from the Strategic Petroleum Reserves of major energy-consuming countries. And the United States will release additional barrels of oil as conditions warrant," he said.

The Paris-based International Energy Agency is holding a last-minute meeting Tuesday on oil supply with the goal of "stabilizing markets," it said earlier this week. The meeting with be chaired by US Secretary of Energy Jennifer Granholm.

Tapping the reserve -- the stockpile of 600 million barrels of crude oil stored in underground salt caverns in Louisiana and Texas -- generally has only a limited effect on gas prices because of how much oil can be released at a time, but would act as a political sign that Biden is confronting the problem.

Chevron CEO Mike Wirth expressed support on Tuesday for governments to release emergency stockpiles of oil to offset supply fears triggered by Russia's invasion of Ukraine.

"I do think a coordinated response by multiple countries could help in the near-term," Wirth said in response to a question from CNN during a briefing with reporters. "Certainly, we've seen markets on edge with concern about supply and supply reliability."

Wirth expressed confidence that there will not be a major supply disruption.

"I've seen nothing to indicate that either Russia's intentions or the intentions of governments involved in sanctions would be to restrict oil supply," Wirth said. "In fact, quite the opposite. It would appear to me that people have been very careful to signal their intention is to try to maintain energy supply to a world that needs it."

This story has been updated with additional reporting.

The-CNN-Wire
™ & © 2022 Cable News Network, Inc., a WarnerMedia Company. All rights reserved.