President Joe Biden is preparing to order the release of up to 1 million barrels of oil a day from the country’s strategic petroleum reserve in a bid to control energy prices
The announcement could come as early as Thursday, when the White House said Biden plans to comment on his administration’s plans to tackle rising gasoline prices. The duration of the release has not been finalized but could last several months. People spoke on condition of anonymity to preview the decision.
High oil prices haven’t prompted more production, creating a challenge for Biden. The president saw his popularity plummet as inflation hit a 40-year high in February and the cost of oil and gasoline soared after Russia invaded Ukraine. Crude oil was trading near $105 a barrel on Wednesday, down from around $60 a year ago.
Still, oil producers have been more focused on meeting investors’ needs, according to a survey released last week by the Dallas Federal Reserve. About 59% of executives surveyed said pressure from investors to preserve “capital discipline” amid high prices was the reason they weren’t pumping more, while less than 10% blamed government regulation.
The steady release of reserves would represent a significant sum and come close to closing the national output gap from February 2020, before the coronavirus caused a sharp drop in oil production.
The Biden administration announced in November the release of 50 million barrels from the strategic reserve in coordination with other countries. And after the start of the Ukrainian war, the United States and 30 other countries agreed to an additional release of 60 million barrels of reserves, half of the total coming from the United States.
According to the Department of Energy, which manages it, more than 568 million barrels of oil were held in the reserve as of March 25.
News of the administration’s planning was first reported by Bloomberg.
Associated Press writer Michael Balsamo contributed.