By Natalie Mojica
The Biden administration announced that the U.S. would release 1 million barrels of oil per day from reserves to help cut gas prices. President Joe Biden plans to use the country’s Strategic Petroleum Reserve over the next six months starting in May to keep down rising gas prices until domestic producers increase their output. The plan will be the largest release from the reserve since its inception in 1975.
“This is a moment of consequence and peril for the world, and pain at the pump for American families,” President Biden said.
This release, which amounts to approximately 180 million barrels of crude oil after six months, along with similar reserve releases in other countries, will amount to an average daily oil release of about a million barrels a day. Oil prices have already decreased because of the announcement, as international benchmark Brent crude oil declined 4.56%.
The Strategic Petroleum Reserve acts as an emergency underground storage of crude oil meant to be a supplement in times of need. The reserve was estimated to hold about 594 million barrels of crude oil at the end of 2021.
The average price of gas per gallon has already increased nearly $1 in the month since Russia’s invasion of Ukraine. The Biden administration has a two-part plan to mitigate prices from rising further. The first part is to increase the supply immediately. However, in his press release, the President also called on Congress to make companies pay fees on oil wells they haven’t used in years and are hoarding without producing.
“The scale of this release is unprecedented: the world has never had a release of oil reserves at this 1 million per day rate for this length of time. This record release will provide a historic amount of supply to serve as a bridge until the end of the year when domestic production ramps up,” the administration said.
The President is also committed to achieving energy independence by reducing America’s dependence on oil altogether, speeding up the transition to clean energy.
“President Biden is committed to doing everything in his power to help American families who are paying more out of pocket as a result…to ease the pain that families are feeling [we’re] increasing the supply of oil starting immediately and achieving lasting American energy independence that reduces demand for oil and bolsters our clean energy economy.”
