Biden to release 50M barrels of oil from Strategic Petroleum Reserve to lower prices

President Joe Biden announced Tuesday he’s tapping the U.S. Strategic Petroleum Reserve (SPR). 

The White House announced the Department of Energy will release 50 million barrels of oil held in the reserve as Americans continue to pay more for gas now than they have in years ahead of Thanksgiving and winter holiday travel. 

The move comes after weeks of diplomatic negotiations and is in coordination with other countries, including, China, India, Japan, the Republic of Korea and the United Kingdom — all major energy consumers.

It's an effort to bring down rising gas prices. Gasoline prices nationwide are averaging about $3.40 a gallon, more than 50% higher than a year ago, according to the American Automobile Association.

"The impact is real, but the fact is we've faced even worse spikes before," Biden said Tuesday when he delivered remarks about the economy. "Just in the last decade, we saw it in 2012 when the price of gasoline hit $3.90. We saw it in 2014 when it hit $3.69. And as recently as 2019, we saw it surpass three dollars in many places. The fact is, we always get through those spikes and we're going to get through this one, and hopefully faster."

The government will begin to move barrels into the market in mid to late December.

But the action is unlikely to immediately bring down gas prices significantly as families begin traveling for the holidays. Gasoline usually responds at a lag to changes in oil prices, and administration officials suggested this is one of several steps toward ultimately bringing down costs.

Oil prices were up almost 2 percent in late-morning trading.

"While our combined actions will not solve the problems of high gas prices overnight, it will make a difference," Biden promised. "It will take time, but before long you should see the price of gas drop where you fill up your tank."

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Shortly after the U.S. announcement, India said it would release 5 million barrels from its strategic reserves. And the British government confirmed it will release up to 1.5 million barrels from its stockpile.

Prime Minister Boris Johnson’s spokesman, Max Blain, said it was "a sensible and measured step to support global markets" during the pandemic recovery. Blain added that British companies will be authorized but not compelled to participate in the release.

The actions by the U.S. and others also risk counter moves by Gulf nations, especially Saudi Arabia, and by Russia. Saudi Arabia and other Gulf countries have made clear they intend to control supply to keep prices high for the time being.





"The three biggest drivers of the staggering 6.2% inflation rate we logged last month were housing, transportation, and food," the Kentucky senator said. "Those aren’t luxuries, they’re essentials, and they take up a much bigger share of families’ budgets from the middle class on down."

RELATED: 11 Democratic lawmakers ask Biden to dip into Strategic Petroleum Reserve to alleviate gas price hike


"As we come out of an unprecedented global economic shutdown, oil supply has not kept up with demand, forcing working families and businesses to pay the price," Energy Secretary Jennifer Granholm said in a statement. "This action underscores the president’s commitment to using the tools available to bring down costs for working families and to continue our economic recovery."





Meanwhile, Biden and administration officials insist that tapping more oil from the reserve is not a contradiction with the president’s long-term climate goals, because this is a short-term fix to meet a specific problem, while climate policies are a long-term answer over decades.

They argue that because they are pushing to boost renewable energy, there will eventually be less dependence in the U.S. on fossil fuels. But that’s a politically convenient argument - in simple terms, higher prices reduce usage, and significantly higher gasoline prices could force Americans into less reliance on fossil fuels.

"Of course, the only long term solution to rising gas prices is to continue our march to eliminate our dependence on fossil fuels and create a robust green energy economy," Senate Democratic Leader Chuck Schumer said in support of the release.

The White House decision comes after weeks of diplomatic negotiations. Biden and China President Xi Jinping talked over steps to counter tight petroleum supplies in their virtual meeting earlier this month, when the two "discussed the importance of taking measures to address global energy supplies," according to the White House account of the conversation.

Japan and South Korea are also participating. Administration officials say it’s the biggest coordinated release from global strategic reserves.



"We will continue to press oil companies who have made record profits and are overseeing what we consider to be price gouging out there when there’s a supply of oil or the price of oil is coming down and the price of gas is not coming down," Psaki said. "It does not take an economic expert to know that’s a problem."


AP writer Charles Sheehan contributed from New York, Jill Lawless from London and Matthew Daly and Ellen Knickmeyer from Washington.