U.S. To Release 50M Barrels Of Oil To Cut Prices

President Joe Biden on Tuesday ordered 50 million barrels of oil released from the strategic reserve to bring down energy costs in coordination with major energy-consuming nations, including China, India, and the United Kingdom, Josh Boak and Colleen Long reported for the Associated Press (AP).

Photo Insert: US oil refinery off the Gulf of Mexico, Texas

The move is aimed at global energy markets, but also at voters who are coping with higher inflation and rising prices ahead of Thanksgiving and winter holiday travel. Gas prices are at about $3.40 a gallon, more than 50% higher than their price a year ago, according to the American Automobile Association (AAA).

There was no discernable impact on the price for a benchmark barrel of US crude after the announcement Tuesday. Prices have been up and down all month, and are up less than 1% so far in this holiday-shortened week.

Biden has scrambled to reshape much of his economic agenda around the issue of inflation, saying that his recently passed $1 trillion infrastructure package will reduce price pressures by making it more efficient and cheaper to transport goods.

Republican lawmakers have hammered the administration for inflation hitting a 31-year high in October. The consumer price index soared 6.2% from a year ago — the biggest 12-month jump since 1990.

The Strategic Petroleum Reserve is an emergency stockpile to preserve access to oil in case of natural disasters, national security issues, and other events. Maintained by the Energy Department, the reserves are stored in caverns created in salt domes along the Texas and Louisiana Gulf Coasts.

There are roughly 605 million barrels of sweet and sour petroleum in the reserve. “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,” Energy Secretary Jennifer Granholm said in a statement.

“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.”

WEEKLY FEATURE : MVP Group Keeps Lights On During Pandemic