The White House announced Tuesday that President Joe Biden would tap into the nation’s strategic oil reserves to offset an increase in gasoline prices.
A senior administration official said that Biden will announce the formal announcement Tuesday afternoon in response to rising consumer discontent before the Thanksgiving holiday.
The White House stated in a statement that other countries including India and China will also release their reserves to support the U.S. move.
The White House stated that “Today, President Obama is announcing that 50 million barrels of oil will be made available from the Strategic Petroleum Reserve by the Department of Energy to lower prices for Americans” and “to address the mismatch between supply and demand extinguishing the pandemic,”
Biden said that he has been working with countries around the globe to address the shortage of supplies as the world emerges from the pandemic.
“And, because of President Biden’s leadership and our diplomatic efforts this release will also be taken in parallel to other major energy consuming countries such as China, India and Japan. After weeks of consultations with other countries, we already see the impact of this work on oil price. The White House stated that oil prices have fallen nearly 10% in the past few weeks since the public reports on this work were made public.
The U.S. Department of Energy will release 50 million barrels of Strategic Petroleum Reserve oil in two ways. 32 million barrels will be exchanged over the next few months. This will allow for the release of oil that will eventually go back to the Strategic Petroleum Reserve in years to come. This exchange is tailored to today’s economic environment. It helps Americans get relief immediately and bridges to the period of lower oil prices. According to the statement, the exchange automatically allows for the restocking of the Strategic Petroleum Reserve over time in order to meet future requirements.”
Experts predict that Americans will experience a rapid drop in gas prices. However, the bigger impact will not be felt until about two weeks after gas stations across the country lower their prices.
Senior administration officials cited a low global oil supply that is driving up fuel prices and said that the decision was made to reduce costs for everyday Americans as the demand pressures and the easement of the pandemic created unique circumstances.
The official said Tuesday that “we think this is an immediate problem that we face as the world exits the pandemic” and that supply has not kept pace. “We believe that this is perfectly suited for that.”
