The U.S. is releasing 50 million barrels of oil from the Strategic Petroleum Reserve in order to cut down on energy costs.
The Department of Energy will make 32 million barrels of oil available over the next few months to lower prices. Congress had previously authorized the release of oil from a sale. A senior administration official told CNN that the first drops of the oil won't hit the market until late December.
Similar moves from other countries will follow Biden's decision to release the oil.
The administration said that the President is prepared to use his full authorities to maintain adequate supply as we exit the Pandemic.
The price of oil fell to a six-week low last week, but consumers haven't seen the price reductions at the pump. The White House said it is looking into how anti-competitive practices in the oil and gas sector may be keeping prices high. There are other factors at play.
The 50 million barrel withdrawal takes the oil out of the Strategic Petroleum Reserve. The dramatic efforts come as the prices of gas, coal, and electricity have reached their highest points in decades. The International Energy Agency says the issue has been worsened by the rapid increase in energy demand as economies reopen from the Pandemic.
The strategic oil releases mark the most significant attempt yet by the U.S. to address soaring gas prices. The president's approval rating has recently fallen due to rising consumer frustration with energy prices, and releasing the oil and bringing down prices could be a crucial step. It is a reminder that tethering the economy to a resource prone to volatile price swings that also happens to damage the climate may not be the best idea.
