U.S. to release 50 million barrels of oil from strategic reserve
President Biden directed the Department of Energy on Tuesday to release 50 million barrels of oil from the U.S. Strategic Petroleum Reserve to help lower fuel prices.
Why it matters: It's the Biden administration's most direct effort yet to tamp down on high gasoline prices that have become a political headache for the White House amid wider inflation.
- The move comes after House Democrats urged Biden in a letter Monday to release crude oil and temporarily ban exports, according to Reuters.
By the numbers: Gasoline prices are averaging around $3.40 a gallon, more than $1 per gallon higher than a year ago, according to the American Automobile Association.
- 32 million barrels will be released over the next several months and eventually replaced in the coming years.
- 18 million barrels will be part of a sale that was previously authorized by Congress.
- The reserve held a total of 604 million barrels of oil as of Nov. 19, according to the Energy Department.
The big picture: The Biden administration said the effort, for the first time, will be coordinated with releases from other major oil consumers nations, including China, India, Japan, South Korea and the United Kingdom.
- Global energy prices have swung wildly over the last two years because of oil supply disruptions and demand imbalances set off by the coronavirus pandemic.
- Biden has repeatedly urged OPEC and its allied countries to ramp up production to meet demand, but the oil cartel has largely ignored his demands and stuck to its current plan to raise output by 400,000 barrels per day in December.
- The International Energy Agency said last week that though the global oil market remains tight, "a reprieve from the price rally could be on the horizon" as U.S. production rises, Axios' Ben Geman reports.
Yes, but: It's unclear whether the release, even alongside the other countries' releases, will have any sustained, significant effect on prices.
Editor’s note: This story has been corrected to state that gasoline prices are more than $1 per gallon higher than a year ago (not double).