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Biden announces sale of 15 million barrels of reserve oil

The president said he also plans to refill the Strategic Petroleum Reserve, which is at its lowest level in decades.

WASHINGTON — President Joe Biden announced Wednesday that he would authorize the sale of more oil from the country’s Strategic Petroleum Reserve as his administration scrambles to rein in high gas prices before the midterm elections.

Speaking at the White House, Biden said the Energy Department would sell the remaining 15 million barrels of the 180 million barrels that were authorized for sale in March — a move that he argued would help drive down the price of gas and give families a bit of “breathing room.”

“I have been doing everything in my power to reduce gas prices since Putin’s invasion of Ukraine caused these prices to spike and rattled international oil markets,” Biden said, referring to Russian President Vladimir Putin.

Inside The Strategic Petroleum Reserve As U.S. Seeks Oil-Reserve Overhaul To Ease Mandatory Drawdowns
A contractor works on a crude oil pipeline at the Energy Department's Bryan Mound Strategic Petroleum Reserve in Freeport, Texas, in 2016.Luke Sharrett / Bloomberg via Getty Images

Biden said the administration will adopt a “ready and release plan” that would allow it to “move quickly” to tap into the Strategic Petroleum Reserve in the future “to prevent oil price hikes and respond to international events.”

The U.S. uses about 20 million barrels of oil a day, and many analysts say the sale of 15 million more barrels from the oil reserve is unlikely to have much effect on gas prices.

The Strategic Petroleum Reserve, which was established as a national energy safety net after the oil crisis of the 1970s, is at its lowest level since 1984.

Biden acknowledged that the reserve's resources have been drained and said his administration would buy crude to refill it once prices fall to $70 a barrel.

Biden, who has pushed oil companies to ramp up oil production for months, said his announcement to refill the reserve should reassure the oil industry that it “can invest to ramp up production now with confidence that they will be able to sell their oil to us.”

“My message to oil companies is this: You’re sitting on record profits, and we’re giving you more certainty so you can act now to increase oil production,” Biden said.

Gas prices in the U.S. had been falling after they hit an average of $5.02 per gallon in June. But the cost of gas has ticked back up in the past few weeks after OPEC+ — an alliance of high oil-producing countries that includes Saudi Arabia and Russia — announced this month it would cut production by 2 million barrels a day.

Global energy markets could be squeezed even tighter in December, when a European embargo on Russian oil goes into effect. The embargo was enacted as part of the West’s response to Putin’s invasion of Ukraine.

The Democrats are fighting to hold on to their narrow majorities in the House and the Senate in the November midterm elections. Biden’s approval rating hovers around 43%.

Asked by reporters whether his actions Wednesday were intended to boost Democrats in the elections, Biden said, “It’s not politically motivated at all.” 

Biden also said his push to increase U.S. oil production did not contradict his administration’s goals to transition to green energy to help fight climate change.

“You can increase oil and gas production now while still moving full speed ahead to accelerate our transition to clean energy. That way we can lower energy costs for American families and enhance our national security at a very difficult moment,” Biden said.

The Strategic Petroleum Reserve's emergency crude oil is stored in four underground salt caverns along the Texas and the Louisiana coasts. At this time last year, the four sites held about 620 million barrels of crude oil, the largest emergency supply in the world and enough reserve to supply all of the U.S.’s consumption needs for about a month. About 400 million barrels of crude oil are left.

The president can order a full drawdown of the reserve in the event of a severe energy supply interruption and order a limited drawdown to address short-term emergency needs.

Since its establishment, only three other presidents have directed the sale of oil from the reserve, while exchanges have been more common.

Barack Obama directed the release of 30 million barrels in 2011 to offset supply disruptions caused by Libya’s civil war, George W. Bush released 11 million barrels in 2005 to help refiners hurt by Hurricane Katrina, and George H.W. Bush released 17 million barrels in 1991 in response to the Gulf War.