- The strategic petroleum reserve is the country’s emergency stockpile of oil.
- The 180 million barrel release would drop the reserve levels to 388 million barrels — the lowest levels since 1984.
- The strategic oil reserve was established in 1975.
Amid record inflation and skyrocketing gas prices, President Joe Biden is expected to again lean on the country’s strategic petroleum reserve for relief. This time the president announced plans to release up to 180 million barrels oil — up to 1 million a day — from the reserve, the largest withdrawal in the reserve’s history.
Biden first dipped into the reserve in November, when he announced the release of 50 million barrels of oil from the stockpile in an attempt to bring down energy prices. That was before Russia, one of the world’s largest oil producers, invaded Ukraine in February, driving the west to impose tough sanctions on Russian oil and putting a further strain on the world’s oil supply.
After the war broke out, Biden committed to the release of an additional 30 million barrels of oil from the strategic reserve to combat soaring gas prices.
The moves have made little difference at the gas pump for consumers. The national gas average remains well above $4, according to the American Automobile Association.
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What is the strategic petroleum reserve?
The strategic petroleum reserve is the country’s emergency stockpile of oil. It is managed by the Department of Energy and maintained for use during emergencies that create petroleum shortages like natural disasters and wars.
The reserves were established following the 1973 oil crisis, when oil-producing Middle Eastern nations imposed an embargo on the United States because of its support of Israel in the Arab-Israeli War.
President Gerald Ford created the reserve in 1975 with the signing of the Energy Policy and Conservation Act, which authorized a stockpile of up to 1 billion barrels of oil.
Where are the strategic petroleum reserves?
Giant underground salt caverns at four sites lining the Louisiana and Texas Gulf coasts hold the nation’s reserves, according to the Department of Energy.
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How much oil is in the strategic reserve?
Before Biden authorized the release of 50 million barrels in November, the reserve had 605 million barrels of petroleum. As of March 25, the reserve held 568 million barrels of oil, according to the Department of Energy.
The 180 million barrel release would drop the reserve levels to 388 million barrels — the lowest level since 1984, according to GasBuddy petroleum analyst Patrick De Haan.
Do other countries have strategic reserves?
Yes, other nations keep emergency petroleum stockpiles too. And they have tapped into them in response to the energy crisis created by the war in Ukraine. In early March, 30European nations drew from their stockpiles in conjunction with the United States. China maintains oil reserves as well.
Will the oil release make a difference in gas prices at the pump?
Releasing 180 million barrels from the stockpile may provide modest and temporary relief at the gas pump for consumers, according to De Haan, but it isn’t a long-term solution to the energy crisis — especially if the war in Ukraine drags on indefinitely.
“I think most Americans are hoping for long term significant relief at the pump,” De Haan said. “This is not going to bring the relief millions of Americans are hoping for. And that’s because 180 million barrels is less than two days of global consumption.”
The last two releases have had a marginal impact on gas prices, according to De Haan, who believes the most that a release of 180 million barrels from the reserve can drop gas prices by is 30 cents.
“And don’t run with the 30 cents, because that’s probably the least possible,” De Haan said. “Maybe somewhere in the 10 to 20 cent range, and it could be temporary.”
George is Digismak’s reported cum editor with 13 years of experience in Journalism