WASHINGTON - President Joe Biden is releasing 50 million barrels of oil from the nation's emergency stockpile to lower energy costs amid a recent spike in gas prices and soaring inflation, the White House announced Tuesday.
Thirty-two million barrels will be released from the Strategic Petroleum Reserve over the next several months and will be replaced in the years ahead. Another 18 million barrels that Congress already had authorized for sale will be released in the coming months.
"American consumers are feeling the impact of elevated gas prices at the pump and in their home heating bills, and American businesses are, too, because oil supply has not kept up with demand as the global economy emerges from the pandemic," the White House said in a statement.
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"That's why President Biden is using every tool available to him to work to lower prices and address the lack of supply."
The release of oil from the nation's stockpile comes after months of diplomatic negotiations and will be taken in parallel with other major energy-consuming countries, including China, India, Japan, Republic of Korea and the United Kingdom.
Biden has been under mounting political pressure to provide Americans relief from higher gas prices and to take steps to tame inflation, which last month hit a 31-year high. Republicans have blamed Biden's policies for the increased cost of consumer goods, including energy prices, while Democrats have pointed to other positive economic indicators, like declining unemployment.
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The decision to dip into the nation's strategic stockpile comes as gas prices rose steadily for the past few months before leveling off last week.
Average gas prices fell this week for the second straight week, dropping 1.9 cents from a week ago, according to the fuel-price website GasBuddy. The average price stands at $3.39 per gallon, according to data that GasBuddy compiled from more than 11 million individual price reports covering over 150,000 gas stations across the country.
The national average is up 2.8 cents from a month ago and $1.30 per gallon higher than a year ago. The national average price of diesel has risen 0.1 cent in the last week and stands at $3.63 per gallon.
Biden had called on oil-producing nations such as Saudi Arabia and the United Arab Emirates to ramp up production to provide some relief to American consumers from high gas prices. But those countries have rebuffed requests to pump more crude, leaving Biden with few options to lower gas prices.
Biden called last week for federal regulators to investigate whether oil and gas companies are engaging in "illegal conduct" by profiting from high gas prices that have skyrocketed during the pandemic. He requested the probe in a letter to Federal Trade Commission chair Lina Khan, claiming "mounting evidence of anti-consumer behavior by oil and gas companies."
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The federal government reported earlier this month that inflation has surged over the past 12 months as the U.S. economy recovers from the coronavirus pandemic. The consumer price index increased by 0.9% in October, the U.S. Bureau of Labor Statistics said, leaving prices 6.2% higher than a year earlier. It's the largest 12-month increase since 1990.
The Strategic Petroleum Reserve is a stockpile to preserve access to oil in case of natural disasters, national security issues and other events. Maintained by the Energy Department, the reserves are stored in caverns created in salt domes along the Texas and Louisiana Gulf Coasts. There are roughly 605 million barrels of petroleum in the reserve.
The US Strategic Petroleum Reserve is a reservoir of more than 600 million barrels of oil stored in underground chambers in the Texas and Louisiana coasts. The reserve was established by Congress in 1975 after the 1973 oil crisis, when oil-exporting nations throttled their production and caused energy prices to soar.
In recent years, the US has tapped the reserve to raise revenue as shifts in global oil production made lawmakers less concerned about potential shortages.
The last major release of the oil reserve came in 2011, when President Barack Obama released 30 million barrels of oil to counter disruptions in supply due to civil unrest in Libya. Former President George W. Bush also released 11 million barrels of oil from the reserve in 2005 to counter disruptions from Hurricane Katrina, while his father, President George H.W. Bush, released 17 million barrels during the first Gulf War.
Michael Collins covers the White House. Follow him on Twitter @mcollinsNEWS.
Contributing: The Associated Press, Matthew Brown.
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This article originally appeared on USA TODAY: US to release 50M barrels from strategic oil reserve amid soaring gas prices