Biden announces historic oil reserve release and presses oil companies to do their part to reduce gas prices

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President Biden spoke about his administration's plans to combat rising gas prices in the South Court Auditorium on the White House. PATRICK SEMANSKY/ASSOCIATED PRESS.

In a historic move, President Joe Biden announces the US will release one million barrels of oil per day from its reserves to help increase supply and reduce gas prices.

President Joe Biden plans to tap the US Strategic Petroleum Reserve for the next six months as domestic producers ramp up production.

President Biden spoke about his administration’s plans to combat rising gas prices in the South Court Auditorium on the White House. PATRICK SEMANSKY/ASSOCIATED PRESS.

“The scale of this release is unprecedented: the world has never had a release of oil reserves at this 1 million per day rate for this length of time,” the White House said in a release. “This record release will provide a historic amount of supply to serve as a bridge until the end of the year when domestic production ramps up.”

The steps are an attempt to reduce gas prices while also putting an onus on oil companies to increase supply.

The dramatic step, which Biden announced from the White House, confronts what has become a looming political problem months ahead of the midterm elections.

“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.

The President added: “Your family budgets to fill a tank — none of it should hinge on whether a dictator declares war.”

The release would amount to 180 million barrels of oil. The President said it would act as a “wartime bridge” as US and global oil production ramps back up after the coronavirus pandemic. The decision was made in coordination with US allies overseas, including in Europe, though officials declined to say whether other countries were also releasing barrels 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 families and democracies around the world,” Biden said.

The US will restock barrels in the reserve when oil prices are lower, the President said, which could help further incentivize production going forward.

A senior administration official told reporters that, in combination with similar actions in other countries, the average daily amount released from global strategic reserves should exceed 1 million barrels.

Oil prices dropped Thursday after reports surfaced Wednesday evening suggesting such a move was imminent.

International benchmark Brent crude predictions for May fell 4% to trade at $108.89 per barrel. U.S. crude futures slid 4.7% to $102.84. Earlier in the session the contract traded as low as $100.16 US per barrel.

The announcement comes as the White House looks for ways to combat a spike in energy prices caused by Russia’s invasion of Ukraine.

The President also warned oil companies against exploiting the situation to increase profits.

“No American company should take advantage of a pandemic or 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.

The President said the second part of his plan to address the rising prices is to create American energy independence in the long term.

“Ultimately, we and the whole world need to reduce our dependence on fossil fuels altogether. We need to choose long-term security over energy and climate vulnerability,” Biden said.

The United States consumes around 20 million barrels of oil per day, while global consumption is around 100 million barrels per day. Biden’s planned releases would put more oil on the global market, potentially bringing down costs.

In Samoa, petrol increased by 22.6 sene per litre, from $3.11 sene to $3.34 sene. Diesel increased by 22.8 sene per litre, from $3.07 sene, to $3.30 per litre. Kerosene went up by 19.9 per litre, from $2.67 to $2.87 sene. The last time petrol and diesel prices went above $3.30 per litre was 2008 in the wake of the Global Financial Crisis.