The move came two weeks after the decision by the Saudi-led Organization of the Petroleum Exporting Countries (OPEC) to side with Russia and agree to cut production, angering Biden as well. This raised fears of another spike in US gas station prices.
“With my announcement today, we will continue to stabilize markets and reduce prices at a time when the actions of other countries have caused such instability,” Biden said at a White House event. He blamed Russian President Vladimir Putin’s invasion of Ukraine for higher commodity and gasoline prices. At the same time, he noted that prices have fallen by 30% from their peak earlier this year.
Biden also repeated a call for U.S. energy companies, gasoline retailers, and refiners to stop using record profits to buy back stocks and instead invest in manufacturing. Prices “are not falling fast enough,” he said. “Families are suffering” and gas prices are squeezing their budgets, he added.
Biden’s plan aims to add enough oil supply to the market to prevent price spikes that could hurt consumers and businesses. He also wants to assure US drillers that the government will buy more if prices fall sharply.
The president has faced criticism from Republicans who accuse him of using the Strategic Petroleum Reserve for political reasons rather than because there is an emergency. He also said he would replenish stocks in the coming years.
Biden has already announced the record release of 180 million. barrel from the reserve earlier this year to combat a potential supply crisis triggered by sanctions against oil-rich Russia following its February invasion of Ukraine. The stockpile, now at its lowest level since 1984, is more than half full, with more than 400 million barrels, Biden said.
Biden’s efforts to use federal powers to balance the U.S. oil market underscore how the war in Ukraine, rampant inflation, and OPEC-decided cuts have upended the plans of a president who took office promising to reduce the role of the oil industry and to rapidly move the country towards a fossil fuel-free future.
“We must responsibly increase America’s oil production without slowing or delaying our clean energy transition,” Biden said Wednesday.
US presidents have limited control over oil prices, but the country’s huge gasoline consumption – the highest in the world – makes high gas station prices a potential political poison. Retail gasoline prices fell from their peak in June, but remain above historical averages and are a major driver of inflation.