Fighting gas prices, Biden taps strategic oil reserves 

WASHINGTON — President Biden on Tuesday ordered 50 million barrels of oil released from America’s strategic reserve to help bring down energy costs.

The U.S. action is aimed at global energy markets and helping Americans coping with higher inflation and rising prices ahead of Thanksgiving and winter holiday travel. Gasoline prices are at about $3.40 a gallon, more than 50% higher than a year ago, according to AAA.

“While our combined actions will not solve the problems of high gas prices overnight, it will make a difference,” Biden said in remarks. “It will take time, but before long you should see the price of gas drop where you fill up your tank.”

The government will begin to move barrels into the market in mid- to late-December. There are roughly 605 million barrels of petroleum in the U.S. reserve.

Oil prices had dropped in the days ahead of the announced withdrawals, a sign that investors were anticipating the moves that could bring a combined 70 million to 80 million barrels of oil onto global markets.

But in Tuesday trading U.S. crude oil rose 2.3% and wholesale gasoline rose 3.4%.

The market was expecting the news, and traders may have been underwhelmed when they saw the details, said Claudio Galimberti, senior vice president for oil markets at Rystad Energy.

“The problem is that everybody knows that this measure is temporary,” Galimberti said. “So once it is stopped, then if demand continues to be above supply like it is right now, then you’re back to square one.”

Shortly after the U.S. announcement, India said it would release 5 million barrels from its strategic reserves and the British government confirmed it will release up to 1.5 million barrels from its stockpile. Japan and South Korea are also participating. U.S. officials say it’s the biggest coordinated release from global strategic reserves.

Prime Minister Boris Johnson’s spokesman, Max Blain, said it was “a sensible and measured step to support global markets” during the pandemic recovery.

The actions by the U.S. and others also risk countermoves by Gulf nations, especially Saudi Arabia, and by Russia. Saudi Arabia and other Gulf countries have made clear they intend to control supply to keep prices high for the time being.

Wyoming Sen. John Barrasso was among Republicans who criticized Biden’s announcement. The No. 3 Senate Republican said the underlying issue is restrictions on domestic production by the Biden administration.

“Begging OPEC and Russia to increase production and now using the Strategic Petroleum Reserve are desperate attempts to address a Biden-caused disaster,” Barrasso said. “They’re not substitutes for American energy production.”