Oil prices plunged Thursday in reaction to the news that President Joe Biden will order the release of up to 180 million barrels of oil from the U.S. Strategic Petroleum Reserve in an effort to lower gas prices.
Biden will deliver remarks Thursday afternoon on his administration’s plan to combat U.S. gas prices, which soared in March to their highest point since 2008 amid heightened demand and Russia’s war in Ukraine.
The administration will release 1 million barrels of oil from the reserve each day for the next six months, the White House said in a fact sheet.
US EXPORTED RECORD AMOUNT OF LIQUEFIED NATURAL GAS IN 2021
That would mark the largest-ever release from the strategic reserves since they were created in 1974.
“This record release will provide a historic amount of supply to serve as bridge until the end of the year when domestic production ramps up,” the fact sheet said.
The Department of Energy will use the revenue from the release to restock the reserve.
Markets reacted quickly to the news on Thursday. Futures for the international benchmark Brent Crude fell by 4.59% to $108 a barrel as of the early afternoon, while futures for U.S.-based West Texas Intermediate fell by 3.82%, down to $104 a barrel.
The decision to tap America’s Strategic Petroleum Reserve would be the third such move undertaken by Biden, who has sought to combat rising political pressure from Republicans to lower prices ahead of the midterm elections.
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Last fall, the administration authorized the release of 50 million barrels from the strategic reserve in November, and in March, it joined other countries and released 30 million gallons amid Russia’s war in Ukraine.
