Fifty million barrels of crude oil are set to be released from the U.S. Department of Energy’s (DOE) Strategic Petroleum Reserve (SPR), as President Joe Biden and Energy Secretary Jennifer Granholm take action to lower gas prices skyrocketing across America.
In a release Nov. 23, the DOE said the move comes in response to a global supply shortage, resulting in the highest oil prices the country has seen in seven years.
“As we come out of an unprecedented global economic shutdown, oil supply has not kept up with demand, forcing working families and businesses to pay the price,” Granholm said in the release.
AAA data indicates the average price for a gallon of gasoline in the U.S. is currently over $3.40, a sharp increase from the average a year ago set just shy of $2.11.
“This action underscores the president’s commitment to using the tools available to bring down costs for working families and to continue our economic recovery.”
Between 50-60% of what consumers pay for their gas comes from crude oil, CNBC reports.
“The president stands ready to take additional action, if needed, and is prepared to use his full authorities working in coordination with the rest of the world to maintain adequate supply as we exit the pandemic,” the White House said in a statement to CNBC.
According to the report, back in August the Biden administration had urged OPEC to increase oil production in order to reduce rising energy prices; however, the group of oil producers decided to maintain the current level of output.
While some have pointed out there are other options to increase oil supply rather than relying on OPEC, CNBC reported the CEO of the American oil company, Occidental Petroleum, believed the best option would have been to ask domestic producers to ramp up their output, rather than turn to foreign producers.
Crude oil has had a tumultuous time since the initial outbreak of the COVID-19 pandemic in early 2020, with tens of millions of barrels being taken off the market per day.
