President Joe Biden has announced more release of oil from the US Strategic Petroleum Reserve and approved the sale of 15 million barrels of oil in December. This move came two weeks after OPEC.
Other oil-producing companies declared to cut oil production by 2 million barrels per day to raise the price of their profits. After the production cut this month, the US President said he would do something to bring down gas prices.
However, the Energy Information Administration reported that the 15 million-barrel release would not cover even one full day’s use of oil in the USA. Biden first decided to release when gas prices and inflation soared last November and then in February due to the Russia-Ukraine war.
Joe Biden Announces Historic Oil Reserve Release
In March, he ordered his officials to release 1 million barrels of oil each day for six months, 180 million barrels from the Petroleum Reserve. That was the largest in the 50 years history of oil reserves.
The decision has sent the strategic reserve to its lowest level since its formation, as the oil reserve contains around 400 million barrels of oil. The national average pump price for a gallon of gas has seen a sharp fall in the summer.
But increased in September and is still higher than it was in the past year. The gas prices when Biden took office in January 2021 were under $4 per gallon, but now it has risen to almost 60 percent higher in the USA, the largest producer and consumer of crude oil.
Joe Biden also ordered officials to establish a plan to restock the dwindling emergency stock. The strategy is to replenish the stockpile when oil prices would be at or lower than $US67 to $US72 a barrel.
The officials argued that this offer would increase domestic production by ensuring a baseline level of demand. The Strategic Petroleum Reserve was established in 1975 by Congress after the oil supplies were interrupted during the 1973–1974 oil embargo.
The US Petroleum Reserve is an emergency oil stockpile in case of natural disasters, national security issues, and other events, maintained by the United States Department of Energy (DOE). It is the largest publicly known reserve in the world.
Stored in caverns created in salt domes in Louisiana and Texas, the tanks have a capacity of 714 million barrels of oil. There were 422.6 million barrels of oil in the reserves as of 23 September 2022.
Many US presidents have released oil reserves before Joe Biden. In 2011, President Barack Obama released 30 million barrels of oil to counter supply disruptions caused by the civil unrest in Libya. In 2005, President George W. Bush released 11 million barrels of oil.
Due to the interruptions in supply from Hurricane Katrina. And during the Persian Gulf War, President George H.W. Bush released 17 million barrels of oil from the reserves. The administration is trying to be seen as helpful to the public.
Pulling out all the stops to lower petrol prices just before the elections. The government should encourage domestic oil production rather than draining the oil reserves and using them as a bridge, as suggested by other officials.