Joe Biden announced the release of 15 million barrels of oil from the Strategic Petroleum Reserve (SPR) to be delivered in December. The president has blamed the oil companies for high prices at the pumps:
It's time for energy companies to pass through their lower costs to consumers. Refiners are making double what they normally make. And retailer margins are more than 40% above typical. It's keeping pump prices higher than they should be, and it’s wrong.
This draw completes the 180-million-barrel reduction in oil reserves announced by the president in April. Biden confirmed that more barrels will be released if necessary:
The Department of Energy will release another 15 million barrels from the Strategic Petroleum Reserve, a responsible move at a time when there are about 400 million barrels for any emergency drawdown. I've called on them to remain ready to move forward with additional releases if needed.
After informing the Department of Energy (DOE), the president inferred that this release is linked to the production cuts announced by OPEC+, the countries involved with the Organization of the Petroleum Exporting Countries.
At a press conference, Biden added that the DOE will increase oil production despite initial plans to limit it due to environmental policy:
We need to responsibly increase American oil production without delaying our transition to clean energy.
In addition, he noted that the United States will not repurchase crude oil for the reserve fund until the price of each barrel reaches between $67 and $72.
At historic lows
The Strategic Petroleum Reserve is at its lowest level since 1984. In September, the United States had 434 million barrels, 27% less than that time in 2021.
The aim of this measure is to help regulate the price of oil, which had been rising even before the war in Ukraine. After the conflict broke out and the cost of gas skyrocketed, Biden has decided to sell one million barrels per day of the reserve to the highest bidder for six months. In principle, this initiative should have ended in October, although Secretary of State Jennifer Granholm indicated that the administration will evaluate whether exports will continue at a later date.
