Buying oil from drillers will be guaranteed by the White House.
The strategic petroleum reserve is releasing oil at record levels.
It's mostly due to cooling demand for fuel that gas prices are falling.
More gas price relief could be on the way for Americans who are strapped for cash.
On Tuesday, the Biden administration said it would release more crude oil from the SPR to replenish it. A federal guarantee to buy oil from some drillers at preset prices would be established by the White House.
It seems to be an attempt to encourage more domestic drilling during a high gas price period. An Energy Department rule will help them do that.
According to the release from the White House, over 125 million barrels of crude oil have already been sold, and the reserve is set to release 180 million barrels by the fall.
According to the Department of Treasury, releasing crude oil from the reserves has brought the price of gasoline down by up to 42 cents a gallon.
Biden banned oil and gas imports from Russia as a result of the war in Ukraine. The end of the boom in oil production in the US meant that prices went up even more.
Americans' pocketbooks are getting squeezed by soaring gas prices because they are a car dependent country. According to the Bureau of Labor Statistics's Consumer Price Index, half of the increase in inflation was due to gas prices.
The decline in gas prices is the result of a decrease in demand. The price of a gallon of gas was $4.33 for the week of July 25.
Over the past 42 days, the price of gas has fallen by 69 cents per gallon. It was the fastest decline in over a decade. The spokeswoman for the White House wrote on the social networking site.
11 states are seeing average prices below $4 according to Patrick De Haan, head of gas analysis at GasBuddy. He isn't sure if releasing crude oil from the reserves is a catalyst for falling prices.
Rise in interest rates and limited improvement in refined product inventories are some of the reasons for the decline.
The price of oil is not necessarily going to be lowered by the release of the SPR.
Business Insider has an article on it.
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