This is done to reduce gasoline prices.
The White House said Tuesday that President Joe Biden will tap into the country’s strategic oil reserves to help offset rising gasoline prices.
Biden, faced with growing consumer dissatisfaction ahead of the Thanksgiving holiday, will make an official announcement Tuesday, a senior administration official told ABC News. The White House said in a statement that other countries, including China and India, will release their own reserves at the same time as the U.S. actions.
“Today, the president will announce that the Department of Energy will provide access to 50 million barrels of oil from the Strategic Petroleum Reserve in order to lower prices for Americans and eliminate the discrepancy between demand resulting from the pandemic and supply,” the White House said.
The statement goes on to say that the U.S. presidential administration is coordinating with other countries to address the shortage of supplies as the world emerges from the pandemic. “And, as a result of President Biden’s leadership and our diplomatic efforts, this decision to sell oil from strategic reserves will be made in parallel with other energy-consuming countries, including China, India, Japan, the Republic of Korea, and the United Kingdom. This will be the culmination of weeks of consultations with countries around the world, and we are already seeing the impact of this work on oil prices. Over the past few weeks, when reports on this work became public, oil prices have fallen by almost 10 percent,” the White House said.
“The U.S. Department of Energy will provide access to market 50 million barrels from the Strategic Oil Reserve in two ways: 32 million barrels will be exchanged over the next few months, releasing oil that will eventually return to the Strategic Oil Reserve in a few years. The exchange is a tool adapted to today’s specific economic environment, when markets expect future oil prices to be lower than they are today, and helps to immediately make life easier for Americans and move to this period of expected lower oil prices. The exchange also automatically provides for the replenishment of strategic oil reserves over time to meet future needs,” the statement said. According to experts, Americans will almost immediately see a sharp drop in prices. But a bigger impact can be expected in about two weeks when gas stations across the country will lower prices.