Earlier today President Biden announced that his administration would release millions of barrels of oil from strategic reserves in an effort to lower gas prices. The unprecedented announcement also specifically targets domestic oil companies for not increasing production via unused federal leases.
At a glance
- President Biden announced the release of millions of barrels of oil from strategic reserves
- Biden blames the unprecedented action on Russia’s invasion of Ukraine, which he says has irrevocably affected the global energy market
- The United States currently consumes about 20 million barrels of oil per day
- Manipulating markets for short-term gains always results in bigger issues down the line
According to the White House, the release of oil reserves will lower gas prices while also demanding that oil companies increase supply through government-approved means. Biden announced the move himself as the Democratic party braces for midterm elections ahead, punctuated mostly by a public outcry against high gas prices.
“Our prices are rising because of (Russian President Vladimir) Putin’s actions. There isn’t enough supply. And the bottom line is if we want lower gas prices we need to have more oil supply right now,” Biden said, per CNN.
“Your family budgets to fill a tank — none of it should hinge on whether a dictator declares war,” Biden said. The President likens his decision to a “wartime bridge” strategy.
White House officials also said that the move comes in concert with similar policy decisions overseas with key allies; though officials declined to say if those allies were also releasing oil from their reserves.
“Together, our combined efforts will supply well over a million barrels a day. Nations (are) coming together to deny Putin the ability to weaponize his energy resources against American families. And also families and democracies around the world,” Biden said.
According to the President, oil companies should not try to capitalize on the increase in supply
Biden promised to restock the barrels in the reserve once prices go lower, but he did not specify an exact timeline for that aspect of the plan. He also encouraged consumers to focus on the big picture situation rather than “immediate short-term price movements.”
Biden also warned oil companies to refrain from price gouging or other market manipulations in order to increase profits during these unforeseen times.
“No American company should take advantage of a pandemic. Nor Vladimir Putin’s actions to enrich themselves at the expense of American families. Investing those profits in production and innovation, that’s what they should do. Invest in your customers,” Biden said.