The Biden administration announced Tuesday that it will release 50 million barrels of oil from the Strategic Petroleum Reserve in an effort to bring down the cost of gasoline as drivers face the highest prices in years.
The decision puts cap on weeks of speculation that President Joe Biden would resort to the measure as high prices cut into his approval ratings.
"Today's announcement reflects the President's commitment to do everything in his power to bring down costs for the American people and continue our strong economic recovery," the White House said in a statement. "At the same time, the Administration remains committed to the President's ambitious clean energy goals."
The decision came in spite of opposition from domestic oil producers, with the Independent Petroleum Association of American deriding opening the SPR in this instance as a way to "manipulate" of the market. Industry groups have demanded Biden ease up on policies restricting fossil fuel exploration and encourage production instead.
Resorting to the SPR is something of a turnaround for Biden, who downplayed the effects of opening it in a CNN town hall last month.
"I could go in the petroleum reserve and take out and probably reduce the price of gas — maybe 18 cents or so a gallon. It's still going to be above $3," Biden said.
Biden said instead at the time that relief would mostly depend on Saudi Arabia, the de facto head of OPEC+, agreeing to boost production, which the cartel has declined to do so in recent weeks.
Energy officials and analysts have not offered a similar calculus to Biden's, with Stephen Nalley, acting administrator of the Energy Information Administration, telling the Senate Energy and Natural Resources Committee during a Nov. 16 hearing that benefits of an SPR release would be minimal and "relatively short-lived," depending on the amount of crude oil released.
Still, congressional Democrats have been pressuring Biden to act quickly in the form of an SPR release, urging him also to consider a ban on crude exports to keep domestically produced oil at home.
Biden responded by also urging major oil consumers in Asia to open up their own stockpiles to support global supply but the reaction has been mixed. The White House said Monday that the SPR release would be accompanied by similar release from other countries, including China, India, Japan, South Korea, and the United Kingdom.
The White House said that the release would include accelerating the scheduled sale of 18 million barrels of oil and exchanging another 32 million barrels that would be returned to the stockpile over time.
The SPR, a national stockpile holding hundreds of millions of barrels of crude, was created in 1975 as a means of maintaining domestic oil supply in the event of emergencies. For example, the Department of Energy opened the reserve in September after Hurricane Ida battered the Gulf Coast.
Original Location: Biden opens Strategic Petroleum Reserve to blunt gas prices
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