The White House announced Tuesday that President Joe Biden is releasing 50 million barrels of oil from the nation’s emergency stockpile to reduce energy costs in the wake of a recent spike in gas prices and soaring inflation.
Over the next few months, 32 million barrels will be released from the Strategic Petroleum Reserve and will be replaced in the coming years. Another 18 million barrels already authorized for sale by Congress will be released in the coming months.
“American consumers and businesses are feeling the impact of higher gas prices at the pump and in their home heating bills because oil supply has not kept up with demand as the global economy emerges from the pandemic,” the White House said in a statement. “That is why President Biden is using every tool at his disposal to work on lowering prices and addressing the supply shortage.”
The release of oil from the country’s stockpile follows months of diplomatic negotiations and will take place in tandem with other major energy-consuming countries such as China, India, Japan, the Republic of Korea, and the United Kingdom.
Biden has been under increasing political pressure to provide Americans with relief from rising gas prices and to take steps to curb inflation, which hit a 31-year high last month. Republicans have blamed Biden’s policies for rising consumer prices, including energy prices, while Democrats have highlighted other positive economic indicators, such as declining unemployment.
The decision to draw from the country’s strategic stockpile comes as gas prices have risen steadily in recent months before leveling off last week.
According to the fuel-price website GasBuddy, average gas prices fell for the second week in a row this week, falling 1.9 cents from a week ago. According to data compiled by GasBuddy from more than 11 million individual price reports covering over 150,000 gas stations across the country, the average price is $3.39 per gallon.
The national average is 2.8 cents higher than a month ago and $1.30 higher than a year ago. Diesel’s national average price has risen 0.1 cent in the last week to $3.63 per gallon.
Biden had urged oil-producing countries such as Saudi Arabia and the United Arab Emirates to increase output in order to provide some relief to American consumers suffering from high gas prices. However, those countries have refused to pump more crude, leaving Biden with few options for lowering gas prices.
Last week, Biden called on federal regulators to look into whether oil and gas companies are engaging in “illegal conduct” by profiting from skyrocketing gas prices caused by the pandemic. He requested the investigation in a letter to FTC Chair Lina Khan, claiming “mounting evidence of anti-consumer behavior by oil and gas companies.”
The federal government reported earlier this month that inflation has risen in the United States over the last year as the economy recovers from the coronavirus pandemic. According to the U.S. Bureau of Labor Statistics, the consumer price index increased by 0.9 percent in October, leaving prices 6.2 percent higher than a year ago. It’s the biggest year-on-year increase since 1990.
The Strategic Petroleum Reserve is a stockpile of oil that is kept on hand in case of natural disasters, national security issues, or other unforeseen events. The reserves, which are managed by the Energy Department, are stored in caverns created in salt domes along the Texas and Louisiana Gulf Coasts. The reserve contains approximately 605 million barrels of petroleum.
The US Strategic Petroleum Reserve is a reservoir of over 600 million barrels of oil stored in underground chambers off the coasts of Texas and Louisiana.
The reserve was established by Congress in 1975, following the 1973 oil crisis, when oil-producing countries cut production, causing energy prices to skyrocket.
In recent years, the United States has used the reserve to generate revenue as changes in global oil production have made lawmakers less concerned about potential shortages.
The last significant release of the oil reserve occurred in 2011, when President Barack Obama released 30 million barrels of oil to compensate for supply disruptions caused by civil unrest in Libya. Former President George W. Bush also released 11 million barrels of oil from the reserve in 2005 to mitigate the effects of Hurricane Katrina, while his father, President George H.W. Bush, released 17 million barrels during the first Gulf War.