Biden plans a major withdrawal from the country's oil reserves to control gas prices
Updated March 31, 2022 at 2:50 PM ET
President Biden announced a plan Thursday to draw 1 million barrels of oil per day for the next six months from the U.S. Strategic Petroleum Reserve — an unprecedented push to use the emergency stocks to try to take the edge off of soaring gasoline prices.
He said gas prices could drop by as much as 35 cents per gallon, but that it would depend on a number of factors, including how many barrels are released by allies holding oil reserves of their own. Prices average $4.22 per gallon for regular — up from $3.61 a month ago and $2.87 a year ago, according to AAA.
"I know gas prices are are painful, I get it. My plan is going to help ease that pain today," Biden said, referring to the surge in gas prices as "Putin's price hike."
"It's time to deliver true energy independence in America once and for all," the president said.
The plan to add up to 180 million barrels of U.S. oil reserves onto the market would be by far the biggest-ever draw from the emergency stockpile of oil, held underground in salt caverns in Louisiana and Texas.
In contrast, the administration tapped the stocks for 50 million barrels in November 2021, and an additional 30 million barrels at the beginning of this month — moves that had only temporary impacts on climbing prices.
But Biden said on Thursday that it's not clear how significantly gas prices will be affected by his decision to tap the reserve.
"How far down, I don't think anyone can tell," he said, noting that today's gasoline prices are based on purchases made in the past, so there could be a delay until prices actually drop.
Biden said prices could come down 10 cents to 35 cents per gallon, but he said much would depend on how many barrels are released by allies holding oil reserves. He estimated allies could release 30 million to 50 million barrels.
There were about 580 million barrels of oil in the U.S. reserves in February, according to the U.S. Energy Information Administration. That means this new plan could draw down total reserves by about a third.
Price inflation — including painfully high gas prices — is a top issue for voters, and Democrats are concerned it could hurt them in the November congressional elections. Prices began rising a year ago as the economy picked up in the wake of the pandemic and have been extremely volatile since January, as it became clearer that Russia would invade Ukraine.
Republicans have sought to pin the blame for higher prices squarely on Biden. Biden and Democrats have deflected blame for rising oil prices on Russia, a major oil exporter whose shipments have been somewhat crimped by financial sanctions over its invasion of Ukraine.
While the United States has banned imports of Russian oil, most importers have not — but there have been some signs that transactions have been affected by shippers and insurers worried about stepping afoul of Western sanctions on Moscow.
The White House also announced it would use the Defense Production Act to support production of other materials used in electric car batteries — namely lithium and nickel. Trying to escape rising gas costs, Americans are flocking to electric vehicles and many of those materials are in China and other countries.
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