President Joe Biden announced on Tuesday that the Department of Energy will release 50 million barrels of oil from the Strategic Petroleum Reserve in an effort to reduce prices amid the global energy crisis.
The release will be made alongside other major energy consuming nations including China, India, Japan, Republic of Korea and the United Kingdom, the White House said, and is the first move of its kind.
Of the 50 released, 32 million barrels will be an exchange over the next several months and 18 million barrels will be an acceleration of oil sales that Congress had previously authorized.
“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 White House’s statement said.
This decision comes as the United States is facing some of the highest oil prices in 7 years.
In Massachusetts, gas prices are averaging $3.42 per gallon right now, according to GasBuddy, up $1.36 from last year and up 8.8 cents from last month.
The crisis is caused by strong demand not being met by oil suppliers. U.S. oil production has been slow rebounding from the pandemic, even as prices are increasing. For example, heating bills are expected to jump as much as 54% compared to last winter. CNN reported that US oil companies are more focused on returning cash to shareholders who have lost money in the last 10 years than they are in oversupplying the market.
Meanwhile, the president said he remains committed to clean energy goals, as the country continues to work towards a strong economy recovery from the pandemic. The White House also said the president is helping address oil supply imbalances in the world.
“He is also focused on how consolidation in the oil and gas sector may be resulting in anti-competitive practices that keep American consumers from benefitting when oil prices fall,” the White House said. “There is mounting evidence that declines in oil prices are not translating into lower prices at the pump. Last week, the President asked the Federal Trade Commission to examine what is going on in oil and gas markets and to consider ‘whether illegal conduct is costing families at the pump.’”
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