Biden is set to release 14 million barrels of oil from US emergency reserves to keep a lid on gas prices, report says

President Joe Biden speaks about student loan debt forgiveness at the White House on August 24, 2022.AP Photo/Evan Vucci

  • The Biden administration is set to release more oil from the US emergency reserve, Reuters reported.

  • It is expected to announce the sale of 14 million barrels this week, the last of the massive SPR drawdown.

  • Biden wants to cool rising gas prices ahead of midterm elections in November, sources told Reuters.

The Biden administration is set to release 14 million barrels of oil from US reserves in an effort to cool rising gasoline prices ahead of the midterm elections in November, Reuters has reported.

The announcement of the drawdown from the Strategic Petroleum Reserve is expected this week, the report Monday said, citing people familiar with the matter.

It would mark the last release from the Biden administration’s plan to draw down 180 million barrels from the SPR, announced earlier this year.

“The administration has a small window ahead of midterms to try to lower fuel prices, or at least demonstrate that they are trying,” one source said, per Reuters.

“The White House did not like $4 a gallon gas, and it has signaled that it will take action to prevent that again,” the source added.

The White House did not immediately respond to Insider’s request for comment.

With the midterm elections in focus, President Joe Biden has been keen to lower prices at the pump for American drivers. His administration has considered a ban on exports of US gas, and Biden himself has called on gas station operators to immediately cut prices.

Gas prices spiked above $5 a gallon in June as western sanctions against Russia squeezed crude oil supplies. They dropped to $3.87 a gallon Tuesday, according to data from the AAA.

The price of gas has been lower in recent days, after starting to rise for the first time in 99 days last month. That reversal of a steady decline came after the Biden administration began releasing the record amount of crude oil from the SPR.

The OPEC+ decision to slash production quotas has prompted speculation about whether the White House would respond with more drawdowns to replace some of the missing supply. Some investors worry the US could flood the market with another 100 million barrels.

But the SPR is meant to supply oil in emergencies, rather than being used to ease pressure on prices, Energy Aspects’ Amrita Sen told CNBC.

The SPR is now “absolutely being used to keep prices lower, even though that’s not what it’s meant to be used for.”

Oil prices fell early Tuesday but recovered somewhat to trade around the flatline. Brent crude futures were at $91.80 a barrel, while WTI crude futures traded at $85.56.

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