President Biden has this week announced 50 million barrels of oil will be made available from the nation’s Strategic Petroleum Reserve, in a coordinated effort to ease pressure on oil prices that is also being undertaken by China, India, the UK, Japan and South Korea.
In a statement to the press, Biden said market volatility following the pandemic meant demand has continued to outpace supply, calling for the need to tap into reserves.
“This coordinated action will help us deal with the lack of supply, which in turn helps ease prices,” he said.
“Today, we’re launching a major effort to moderate the price of oil, an effort that will span the globe in its reach and ultimately reach your corner gas station, God willing…Before long, you should see the price of gas drop.”
US consumers are currently facing the highest inflation rates in over 30 years, as well as the highest petrol prices since 2012. The latest White House decision marks the first time in decades that the reserve, typically intended for instances of war and natural disaster, has been tapped into, and comes just ahead of the holiday season when the nation will see a spike in travel as families hit the road for Thanksgiving and Christmas celebrations. The last time the reserves were used was in 2000 when President Bill Clinton released 30 million barrels in an attempt to reduce domestic heating costs in the lead up to winter.
The decision has not been met with universal approval, with some government officials warning that it is not a long-term solution to the hike in prices seen after the pandemic – and from which it is not yet certain nations will soon recover. While some are calling for a faster transition to renewable alternatives, others are saying laying new pipelines is crucial. Either way, boosting domestic energy production is the solution on many people’s lips.
“Today’s release from the Strategic Petroleum Reserve is an important policy band-aid for rising gas prices but does not solve for the self-inflicted wound that shortsighted energy policy is having on our nation,” said Democratic US Senator Joe Manchin, Chairman of the Senate Committee on Energy and Natural Resources. “With an energy transition underway across the country, it is critical that Washington does not jeopardise America’s energy security in the near term and leave consumers vulnerable to rising prices.
“Historic inflation, taxes and the lack of a comprehensive all-of-the-above energy policy pose a clear and present threat to American’s economic and energy security that can no longer be ignored.”
Similarly, Senator John Barrasso said the policies are “hiking inflation and energy prices”, instead calling for increased domestic energy production, while Democratic senate majority leader Charles Schumer said the only long-term solution is to “continue our march to eliminate our dependence on fossil fuels and create a robust green energy economy.”