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Fifty million barrels of oil to be released from reserves: President Biden

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Oil Rig

With gas prices floating around a seven-year high, President Joe Biden made an announcement that was the first of its kind on Tuesday morning: a global joint effort to release 50 million barrels of oil in an effort to thwart the rapid rise in oil prices.

“Today, the President is announcing that the Department of Energy will make available releases of 50 million barrels of oil from the Strategic Petroleum Reserve to lower prices for Americans and address the mismatch between demand exiting the pandemic and supply,” a statement from The White House said Tuesday morning.

The announcement comes after coordination with countries including China, India, Japan, Republic of Korea, and The United Kingdom over the past few weeks to execute a joint effort in unison.

According to The White House, oil prices are down nearly 10 percent as news of the release began to travel. There will be two ways in which the 50 million barrels of oil will be released from the Strategic Petroleum Reserve as stated in the White House official statement.

  • 1. 32 million barrels will be an exchange over the next several months, releasing oil that will eventually return to the Strategic Petroleum Reserve in the years ahead. The exchange is a tool matched to today’s specific economic environment, where markets expect future oil prices to be lower than they are today, and helps provide relief to Americans immediately and bridge to that period of expected lower oil prices. The exchange also automatically provides for re-stocking of the Strategic Petroleum Reserve over time to meet future needs.
  • 18 million barrels will be an acceleration into the next several months of a sale of oil that Congress had previously authorized.

Politicians and political analysts took to Twitter following the announcement examining, criticizing, and supporting the unprecedented move. 

According to the Energy Information Administration, Americans used 20.7 million barrels of oil per day in September. At that same pace the reserve release of oil would equal approximately 2.5 days worth of oil. 

The President's statement also called for an examination into potential illegal activity leading to an effect on the gas and oil industry saying,

"There is mounting evidence that declines in oil prices are not translating into lower prices at the pump. Last week, the President asked the Federal Trade Commission to examine what is going on in oil and gas markets and to consider “whether illegal conduct is costing families at the pump.” 

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