- President Joe Biden will release 15 million more barrels of oil from the country’s reserves to lower gas prices.
- The Biden administration has already released around 165 million barrels following the invasion of Ukraine.
- Biden also urged oil companies to invest in more production, and not their own stocks.
President Joe Biden announced Wednesday that the federal government would step in yet again to put more oil on the market and bring down still-high gas prices.
That will come through the release of 15 million barrels from the country’s Strategic Petroleum Reserve (SPR), part of a 180-barrel initiative that the Biden administration started undertaking in May to curb soaring prices at the pump. The release will extend the program through the end of the year.
“Gas prices hit almost every family in this country and they squeeze their family budgets. When the price of gas goes up, other expenses get cut,” Biden said. “That’s why I have been doing everything in my power to reduce gas prices since Putin’s invasion of Ukraine caused these prices to spike and rattle international oil markets.”
The White House had already released about 165 million barrels as part of the program. The additional release unveiled Tuesday represents the final stage of the multi-month plan.
The president also castigated oil companies for pocketing larger profits instead of tamping down prices for consumers. Profits at the six largest US oil producers surpassed $70 billion in the second quarter, and much of the windfall went toward share buybacks that boosted their respective stock prices.
Crude prices have fallen substantially since peaking in the summer, but firms are still prioritizing margins over easing Americans’ pain at the pump, the president said.
“That’s great if you own a lot of stock in oil company or if you’re an executive at an oil company — puts a lot of money in your pocket,” Biden said. “That is how you get paid. But it’s not the case for the vast majority of Americans.”
The SPR serves as an emergency oil stockpile for the US, and can hold more than 700 million barrels of crude spread across its four underground sites. The network held just over 408 million barrels in the week ending October 7, continuing a decline that started under President Donald Trump and only sped up as Biden looks to offset soaring energy costs.
The US will “replenish” the stockpile when crude prices fall to $70 per barrel, the president added. West Texas Intermediate crude traded at roughly $86 per barrel Wednesday afternoon, up slightly from Monday’s levels but still down significantly from the June peak of nearly $120.
The administration’s plan to purchase crude when it’s cheaper “means oil companies can invest to ramp up production now with confidence they’ll be able to sell their oil to us at that price in the future,” Biden said Wednesday.
“Refilling the reserve at $70 per barrel is a good price for companies, it’s a good price for taxpayers, and it’s critical to our national security,” he added.
Replenishing the SPR should provide security for the oil companies sitting on their profit windfalls. Removing that uncertainty, the president said, means that companies can invest in producing more, rather than just enriching investors.
“My message to American energy companies is this: You should not be using your profits to buy back stock or for dividends,” Biden said. “Not now, not while a war is raging.”