The federal government is taking the rare step of releasing oil from the nation’s Strategic Petroleum Reserve in an effort to address rising gas prices ahead of the holiday season, President Joe Biden said Tuesday. As part of the move, the Department of Energy will make available 50 million barrels of oil to lower prices and address the mismatch between consumer demand and supply amid the pandemic that has driven prices to their highest levels in seven years, the White House said in a statement.
The action, which has been in the works for several weeks, comes amid growing concern within the White House about inflation as prices rise on everything from fuel to Thanksgiving turkeys. The release of the oil reserves should quickly translate into lower prices at the pump, and officials will be watching to make sure energy companies are passing along lower oil prices to consumers, a senior administration official said Tuesday. President Biden called the reserve release the largest in U.S. history, and said in an address from the White House that “I will do what needs to be done to reduce the price you pay at the pump.” The decision was made jointly with other major energy-consuming countries — including India, Japan, and South Korea — to curb increasing energy prices after oil-rich nations rejected repeated calls to increase production as the global economy rebounds from the pandemic and fuel demands rise.
While the use of the nation’s oil stockpile is typically reserved for emergencies, the administration has broad authority to conduct oil exchanges — releases that are repaid to the stockpile — and is partly relying on a previously authorized release, the official said. Of the 50 million barrels, 32 million will be returned to the Strategic Petroleum Reserve over the next three years on the assumption that prices go down in the future, and 18 million will come from a sale approved by Congress in the 2018 budget.
JUST ANNOUNCED: President Biden will release 50 million barrels of oil from the Strategic Petroleum Reserve.
— Christine Pelosi (@sfpelosi) November 23, 2021
The Energy Department said it plans to release most of the oil between January and April, with some early deliveries accepted in late December. Oil prices have already dropped 10 percent in anticipation of the announcement, the senior administration official said.
President Biden says India, Japan, South Korea and the United Kingdom have agreed to release additional oil from their reserves to help lower gas prices — "and China may do more, as well." https://t.co/OaxvaA24hA pic.twitter.com/UzqRgz2lcO
— CBS News (@CBSNews) November 23, 2021
“Before long you should see the price of gas drop where you fill up your tank,” the President said.
BREAKING NEWS: Pres. Biden will release 50 million barrels of oil from the U.S.’ emergency stockpile in an attempt to address rising gas prices for the holiday travel season. pic.twitter.com/tF0OkRonyB
— CBS Mornings (@CBSMornings) November 23, 2021
Watch President Biden’s comments, below.