The government plans to release at least 10-15 million oil barrels from the country’s emergency stockpile. The SPR would release oil as the next instalment of a 180 million barrel programme that began in the spring.
The administration has also discussed with oil corporations the possibility of selling an extra 26 million barrels. Congress passed a law that mandated this for the fiscal year 2023, which starts on 1 October.
Last week, Biden said that fuel prices were too high and that he would announce cost-cutting measures this week. US Government deputy energy secretary David Turk also noted last week that the administration might use the SPR to stabilise oil in the following weeks and months if required.
A source told Reuters: “The administration has a small window ahead of midterms to try to lower fuel prices, or at least demonstrate that they are trying. The White House did not like $4-a-gallon gas and it has signalled that it will take action to prevent that again.”
In May, the US Energy Department announced that it would accept bids later this year for a buyback of roughly one-third of the 180 million barrel sale. It predicted that deliveries would be tied to reduced oil prices and lower demand, most likely after the next fiscal year. According to two Reuters sources, the buybacks could continue until 2025.
According to the American Automobile Association, the national average price of gasoline in the US reached $3.89 per gallon on Monday. The prices rose to 20 cents from one month prior and 56 cents last year. In June, gasoline prices reached a new high of more than $5.00 a gallon.