Biden is releasing 15 million barrels from the strategic oil reserve to tame prices
President Biden announced Wednesday that he is authorizing the release of 15 million barrels from the Strategic Petroleum Reserve, a draw that completes the plan announced earlier this year to release a total of 180 million barrels.
Biden said the 15 million barrels will be released sometime in December, which should help keep gas prices at bay, he said.
"But they're not falling fast enough. Families are hurting," Biden said.
With over half of the Strategic Petroleum Reserves still available — over 400 million barrels — the White House will prepare for future releases should the need arise in the coming months.
"This allows us to move quickly to prevent oil price spikes and respond to international events," Biden explained.
The upcoming oil reserve release is aimed at ensuring there's enough oil on the market to ensure gasoline prices don't spike up, no matter what actions Russia and other big players take.
But the administration's move is unlikely to lead to lower gas prices, according to Jay Hakes, the former head of the Energy Information Administration.
"We're talking about fairly small potatoes here with putting 15 million barrels into the market, and I think the market was probably expecting that to happen anyway," Hakes told NPR. "I think the overall 180 million has been helpful in getting us through a rough patch. This additional enhancement I don't see moving the needle that much."
Hakes also said the move may be seen as a way to push back at OPEC+, to show the U.S. also has resources to influence the market.
"I don't think that the United States can just sit back and take what OPEC did," Hakes said.
OPEC+ announced that it plans to cut production in November by 2 million barrels a day, though it's unclear how quickly that cut could take hold. Biden, who had visited Saudi Arabia over the summer in order to improve relations, was frustrated and warned of "consequences" for Saudi Arabia for the move.
The announcement comes weeks before the elections
Biden's announcement comes just weeks ahead of the midterms where inflation — including the price of gas — has emerged as a major issue for voters. Polls show the issue adversely affecting the Democrats, so Biden and others have focused on abortion access and the fate of democracy.
The White House announcement earlier this year to pull 180 million barrels in total from the SPR, which is now at a four-decade low, was criticized by Republicans as a political move ahead of the midterms — though an administration official said the move resulted in the average driver saving about $60 per month compared to peak prices in June.
The Biden administration said it plans to restock the reserves as soon as oil prices fall between $67 and $72 per barrel. U.S. crude prices are around $82 per barrel. He said that pledge would give oil companies a floor so that they can take steps to boost domestic production now.
"You're sitting on record profits and we're giving you more certainty, so you can act now to increase oil production now," Biden said, addressing oil company executives. He also urged the industry to make sure gas prices fall in concert with oil prices. "You should not be using your profits to buy back stock or for dividends – not now," he said.
The American Petroleum Institute pushed back in a statement Wednesday. API President and CEO Mike Sommers said that increasing energy demands, constrained supply, geopolitical instability and faulty policy decisions are what's driving up gas prices.
"At a time when American energy can be a stabilizing force at home and abroad, we urge caution in continuing to rely on short-term efforts that are no substitute for sound long-term policies that enable American energy leadership," Sommers said.