President Joe Biden has authorized the release of oil products from the United States Strategic Petroleum Reserve. The order comes a week after the President requested that the Federal Trade Commission investigate potential wrongdoing causing price inflation.
"Today, the President is announcing that the Department of Energy will make available releases of 50 million barrels of oil from the Strategic Petroleum Reserve to lower prices for Americans and address the mismatch between demand exiting the pandemic and supply." The White House wrote in a statement. "As a result of President Biden's leadership and our diplomatic efforts, this release will be taken in parallel with other major energy-consuming nations including China, India, Japan, Republic of Korea and the United Kingdom."
West Texas Intermediate
The artificial injection of oil into the domestic market is intended to boost the available supply, which in theory translates to lower prices. The last and only use of the SPR was by former President Barack Obama, whose 2011 order was intended to stymie skyrocketing gas prices. In a move intended to bolster oil companies, President Donald Trump ordered the SPR filled to capacity.
Energy Secretary Jennifer Granholm first mused using the SPR in August. Granholm's suggestion came in response to National Security Advisor James Sullivan's rebuff by OPEC+ after pushing for a production increase. Granholm also floated the idea of an export ban, though if the administration is still considering this isn't currently known.
Given that President Biden's release is coming as a cooperative effort with major energy producers, consumers might notice a slight drop in prices in the coming days. The actual extent of the effects is hard to plot, however. Given ongoing supply line disruptions, it becomes a question of how quickly fuel can be moved, rather than how much is currently on hand.