Biden to complete release from emergency oil reserves; could take more action on gas prices

WASHINGTON – President Joe Biden will announce Wednesday he’s releasing 15 million barrels of oil from the nation’s emergency reserves, one of the few actions he can take before next month’s midterm elections to show voters he feels their pain at the pump.

The move completes Biden’s March directive to release 180 million barrels from the Strategic Petroleum Reserve, the largest sale in the reserve’s nearly 50-year history.

The national average pump price for a gallon of gas has significantly dropped since summer but has ticked up since September and is still higher than it was last year.

Biden’s move comes about two weeks after OPEC and its oil-exporting allies announced it would cut oil production by 2 million barrels per day to boost prices.

The national average pump price for a gallon of gas has significantly dropped since summer but has ticked up since September and is still higher than it was last year.

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Biden’s move comes about two weeks after OPEC and its oil-exporting allies announced it would cut oil production by 2 million barrels per day to boost prices.

The final 15 million barrels of oil that will be added to the market in December is less than one full day’s use of oil in the U.S., according to the Energy Information Administration.

The latest

• Biden first tapped the reserves last November amid a spike in gas prices and soaring inflation, later exacerbated by Russia’s invasion of Ukraine in February.
• In March, Biden ordered the release of 1 million barrels of oil a day for six months. That’s the largest release from the reserve in its nearly 50-year history. The administration stretched out the release, which will now be completed by the end of the year.
• Reducing the reserves too much runs the risk of not having enough in a crisis, such as an oil embargo, cyberattack, war in the Middle East, hurricane or other natural disaster.
• The reserve now contains about 400 million barrels of oil, its lowest point in 40 years. Still, the White House says that's more than sufficient to tap further, if needed.

What is the Strategic Petroleum Reserve?

The Strategic Petroleum Reserve is a stockpile to preserve access to oil in case of natural disasters, national security issues and other events. Maintained by the Energy Department, the reserves are stored in caverns created in salt domes along the Texas and Louisiana Gulf Coasts. 

The reserve was established by Congress in 1975 after the oil crisis in 1973 when oil-exporting nations throttled their production and caused energy prices to soar.

The United States has tapped the reserve to raise revenue as shifts in global oil production made lawmakers less concerned about potential shortages.

Before Biden, the last major release of the oil reserve came in 2011, when President Barack Obama released 30 million barrels of oil to counter disruptions in supply due to civil unrest in Libya. President George W. Bush released 11 million barrels of oil from the reserve in 2005 to counter disruptions from Hurricane Katrina, and his father, President George H.W. Bush, released 17 million barrels during the Persian Gulf War.

More on the strategic petroleum reserve:Biden continues to hope it can bring down high gas prices

Does releasing oil from the reserve lower gas prices?

Biden’s March directive, combined with a similar action by other countries, lowered the price of gas by between 17 cents to 42 cents per gallon, according to a July analysis by the Treasury Department.

But Patrick De Haan, head of petroleum analysis at GasBuddy, attributed most of the decline in prices to other factors, including the economic slowdown prompted by rising interest rates. 

Republicans say that, rather than draining the reserves, Biden should be encouraging more domestic oil production.

Why is Biden acting now?

After the OPEC+ alliance of oil exporting countries announced production cuts this month, Biden said he would look for ways to bring down gas prices.

In the races that will decide which party controls Congress next year, Republicans are hammering Democrats over the cost of gas and other goods and services. While there’s not much that Biden or any other president can do to lower them, he is trying to show he's doing something.

Could Biden release more oil?

Biden will make it clear he’s prepared to release a “significant additional” amount of oil, if needed, due to market disruptions from the war in Ukraine or other events, according to the White House.

Biden would need to make a decision in about a month if he wants to make more reserve oil available to the market in January, after the completion of the final 15 million barrel release.

The total 180 million barrel release was intended to serve as a bridge until the end of the year, when domestic production would ramp up. Officials said production has increased but is still below its pre-pandemic level.

The administration hopes that new fixed-price contracts that the Energy Department can enter into with suppliers will encourage firms to invest in production right now by creating certainty around future demand for crude oil.

Contributing: Michael Collins.