The Biden administration announced on Tuesday, Nov. 23, that it would tap the strategic oil reserve to cool down surging energy prices.
“Today, I’m announcing that—the largest-ever release from the U.S. Strategic Petroleum Reserve to help provide the supply we need as we recover from this [COVID-19] pandemic,” President Joe Biden said in a statement.
“In addition, I brought together other nations to contribute to the solution,” he said, adding that India, Japan, Korea, the U.K. and China have agreed to join the U.S. to release oil from their reserves.
“This coordinated action will help us deal with the lack of supply, which in turn helps ease prices,” Biden said.
According to the White House, the Department of Energy will release 50 million barrels of oil available from the Strategic Petroleum Reserve to combat the rapid rise in energy prices.
The Strategic Petroleum Reserve held 604.5 million barrels spread across four sites as of Nov. 19. The Department of Energy said that the strategic oil would take 13 days after a presidential announcement to hit the market.
The U.S. consumers are facing pain at the pump where prices are hovering around their highest level in seven years.
Crude prices make up between 50% and 60% of what consumers pay to fill up their tanks.
The Biden administration chose to use the Strategic Petroleum Reserve after it has failed to persuade the Organization of the Petroleum Exporting Countries (OPEC) and oil-producing allies to boost their production to cool down the global energy markets. They only decided to maintain its previously agreed-upon schedule of raising production by 400,000 barrels per month.
While rebuffing Biden’s calls for increased production, this group, also called OPEC+, questioned why the administration pumped oil itself because the United States has the total capability to increase production itself if it needs more energy.
According to Forbes, Biden opted to turn to OPEC+ due to a Democratic Party energy doctrine, announced in January 2021, that seeks to limit the production of hydrocarbons in the U.S. That is why the Biden administration announced a moratorium on drilling permit issuances on federal lands and waters, and killed the KEYSTONE XL pipeline from Canada to the U.S. Biden has pressured other countries to increase their output to lower domestic oil prices.