Biden releasing oil from Strategic Petroleum Reserve to help lower gas prices
President Biden on Tuesday announced a plan to release oil from the Strategic Petroleum Reserve (SPR), in coordination with other countries, as part of efforts to tamp down high gas prices facing American consumers with the busy Thanksgiving holiday and travel season beginning.
The Department of Energy will release 50 million barrels of oil from the SPR, of which 32 million will be an exchange of oil that will be returned in the years ahead, and 18 million will be the acceleration of a sale of oil previously authorized by Congress, according to the White House.
The president spoke of his efforts to stem surging gas prices during remarks from the White House, noting that the nation has experienced gas prices surpassing $3 per gallon as recently as 2012, 2014 and 2019.
"The fact is we always get through those spikes, but we're going to get through this one as well and hopefully faster," he said. "But it doesn't mean we should just stand by idly and wait for prices to drop on their own. Instead, we're taking action."
The move is part of a coordinated effort with major energy-consuming nations including China, India, Japan, South Korea and the United Kingdom to release reserves of crude oil. The White House said the agreement is the culmination of weeks of talks with other nations as part of Mr. Biden's efforts to address the lack of oil supply stemming from the COVID-19 pandemic.
"This coordinated action will help us deal with the lack of supply, which in turn helps ease prices," the president said. "The bottom line: today we're launching a major effort to moderate the price of oil, an effort that will span the globe in its reach and ultimately reach your corner gas station."
The White House said Mr. Biden's move is a reflection of his commitment "to do everything in his power to bring down costs for the American people and continue our strong economic recovery."
The president "stands ready to take additional action" if it is needed, the White House said, and "is prepared to use his full authorities working in coordination with the rest of the world to maintain adequate supply as we exit the pandemic."
If successful, the move would pit the countries against the OPEC coalition — including Russia and Saudi Arabia — for control over oil prices.
The president conceded in his remarks that the combined action with other nations won't move prices at the pump overnight, but said "it will make a difference."
"It will take time," he said, "but before long you should see the price of gas drop where you fill up your tank, and in the longer term, we will reduce our reliance on oil as we shift to clean energy."
White House press secretary Jen Psaki said Monday that the White House will continue to press OPEC and oil and gas companies to lower prices.
"We have been having conversations with a range of countries about the importance of, of making sure that the supply out there meets the demands and helps meet, prevent an imperiling of the global economic recovery," Psaki said.
The SPR is a large supply of oil along the Texas and Louisiana coasts that the U.S. keeps for emergencies. The SPR is a sort of emergency fund for gasoline, intended to be tapped only to address a disruption in the oil supply, such as after natural disasters, but it hasn't been used to control oil prices. Releasing oil from the SPR might lower prices in the short term, but its impact could be limited.
"The devil would be in the details," said Patrick DeHaan, head of petroleum analysis at GasBuddy, on Monday. "The president ... has to make sure it's enough to move the needle but not so much as to deplete the SPR."
Fin Gomez, Irina Ivanova and Melissa Quinn contributed to this report.