The Biden administration announced on Tuesday the release of 50 million barrels of crude from the country’s strategic reserve to tackle high prices.
The White House said this action was taken in “parallel” with countries such as India, China, Japan, South Korea and the United Kingdom. New Delhi has ordered the release of 5 million barrels from the reserve and other countries will make their respective announcements.
“American consumers are feeling the impact of elevated gas prices at the pump and in their home heating bills, and American businesses are, too, because oil supply has not kept up with demand as the global economy emerges from the pandemic,” the White House said in the announcement, adding, “That’s why President Biden is using every tool available to him to work to lower prices and address the lack of supply.”
Gas at the pump is selling at an average of $3.40 a gallon (3.8 litres), with prices going up to $4.70 in California, according to the Automobile Associations of America. Tuesday’s national average of $3.40 is 3 cents more than a month ago and $1.29 more than a year ago - when oil prices had nosedived because of slump in demand caused by Covid-19 lockdowns - in the wake of and 81 cents more than in 2019.
The release from the reserve is expected to hit the pump middle or late December.
President Biden had been under mounting pressure from Republicans and from with his own democratic party to use the reserve to tackle the rising oil prices, especially in view of the holiday season that starts with Thanksgiving later this week, when Americans are expected to hit the road
The US Strategic Petroleum Reserve is a stockpile of gas meant to be used during emergencies such as a war or a hurricane. It was created after the oil crisis of the 1970s. The oil is stored in underground salt caverns in Texas and Louisiana, which together are reported to hold more than 600 million barrels, which is slightly less than a month’s requirement.
The President has been working with countries across the world to address the lack of supply as the world exits the pandemic. “As a result of President Biden’s leadership and our diplomatic efforts, this release will be taken in parallel with other major energy consuming nations including China, India, Japan, Republic of Korea and the United Kingdom,” the White House said. “This culminates weeks of consultations with countries around the world, and we are already seeing the effect of this work on oil prices. Over the last several weeks as reports of this work became public, oil prices are down nearly 10%.”
{{/usCountry}}The President has been working with countries across the world to address the lack of supply as the world exits the pandemic. “As a result of President Biden’s leadership and our diplomatic efforts, this release will be taken in parallel with other major energy consuming nations including China, India, Japan, Republic of Korea and the United Kingdom,” the White House said. “This culminates weeks of consultations with countries around the world, and we are already seeing the effect of this work on oil prices. Over the last several weeks as reports of this work became public, oil prices are down nearly 10%.”
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