The U.S. is tapping the Strategic Petroleum Reserve and releasing around 50 million barrels of oil in an effort to cut down on soaring energy costs.
In a statement, President Joe Biden’s administration said the Department of Energy will make 32 million barrels of oil available over the next few months to lower prices quickly. The other 18 million represents an acceleration of oil released from a sale Congress had previously authorised. Though the oil is being made available, the first drops of it likely won’t hit the market until mid to late December, a senior administration official told CNN.
Biden’s decision to release the oil will occur in tandem with similar moves from other large countries including China, India, Japan, South Korea, and the UK.
“The President stands ready to take additional action, if needed, 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,” the administration said in a statement.
Prior to the announcement, oil prices fell to a six-week low last week, but those price reductions have yet to make their way to consumers filling up gas at the pump, according to CNBC. In addition to releasing a glut of oil, the White House said it is investigating how consolidation and anti-competitive practices in the oil and gas sector may be keeping prices higher. (There are likely other factors at play, though, including supply issues.)
The 50 million barrel withdrawal pulls from nearly 605 million barrels of oil currently held in the Strategic Petroleum Reserve, according to Department of Energy data. The dramatic efforts come as prices of gas, coal, and electricity have reached some of their highest points in decades. Though the result of numerous factors, the rapid uptick in energy demand as economies reopen from pandemic-induced lockdowns has exacerbated the issue, according to the International Energy Agency.
The strategic oil releases mark the most significant attempt yet by the U.S. to address soaring gas prices. Releasing the oil and bringing down prices could be crucial for the president, who has recently seen his approval rating dip down in part due to rising consumer frustrations around energy prices. It’s also a good reminder that maybe tethering the economy to a resource prone to volatile price swings that also happens to, you know, damage the climate may not exactly be the best idea.
Editor’s Note: Release dates within this article are based in the U.S., but will be updated with local Australian dates as soon as we know more.