President Joe Biden on Thursday ordered the release of an average of 1 million barrels of oil per day from the nation’s strategic reserves to help mitigate dramatic surges in gas prices across the nation — what the White House has labeled “Putin’s price hike.”
The White House announced the plan on Thursday and said the draw on the reserves — the largest in history — will last for as long as 180 days. The goal is to add a huge amount of oil into the global economy and soften price spikes that have hit Americans in their pocketbooks.
“That release will immediately shore up global supplies,” a senior administration official said Thursday. “These barrels will be a war time bridge to additional U.S. production that we expect later this year.”
The Strategic Petroleum Reserve holds about 550 million barrels of oil. Bloomberg first reported the White House’s plan on Wednesday, noting that it could come in conjunction with a diplomatic push for other nations to release portions of their stockpiles as well.
Gas prices have remained high for the last month amid the Russian invasion of Ukraine, which has disrupted oil and gas deliveries around the world. The average price for a gallon of gas in the U.S. was around $4.23 on Wednesday, far higher than the $3.61 a gallon a month before.
Gas prices in March 2021 were about $2.86 a gallon on average, according to AAA.
Biden has borne the brunt of GOP frustration over the stratospheric prices, and his administration has scrambled to rein in inflation after two years of the coronavirus pandemic. Republicans have all but promised to use the gas pump as a cudgel before November’s midterm elections while the White House has blamed oil companies for failing to expand production and alleviate the high prices.
“The fact is that there is nothing standing in the way of domestic oil production,” a senior administration official said. “U.S. oil companies are recording their largest profits in years and could put those profits toward productive use. While some companies have already announced they are increasing immediate production, too many are choosing to make extraordinary profits without investing in more supply.”
The official said Biden is also proposing a “use it or lose it policy” to incentivize short-term production. As part of Thursday’s announcement, the White House called on Congress to pass legislation to require oil and gas companies to pay fees on unused wells and federal leases.
Oil and gas companies are sitting on more than 9,000 approved but unused permits to drill across millions of acres of federal lands.
The White House had previously announced the release of 50 million barrels of oil from the reserve in November and a further 30 million barrels after the invasion of Ukraine began.