WASHINGTON (CN) — President Joe Biden ordered the release of 50 million barrels of oil from America's emergency stockpile on Tuesday in response to soaring gas and energy prices.
The U.S. is coordinating the release, set for December, with international energy giants including China, India and the United Kingdom. The goal is to introduce more oil with the effect of stabilizing the global energy market and alleviating the pressures that high inflation and gasoline prices have placed on American workers.
"American consumers are feeling the impact of elevated gas prices at the pump and in their home heating bills, and American businesses are, too, because oil supply has not kept up with demand as the global economy emerges from the pandemic," the White House said in a statement.
The oil will come from the Strategic Petroleum Reserve, a stockpile of more than 600 million barrels of oil intended to be used in emergency situations, and dispensed over the course of several months.
Biden noted during a Tuesday news conference that other countries, including India, Japan, the United Kingdom and the Republic of South Korea, will also be releasing oil from their own reserves to meet demand.
“This is a problem not just here in the United States, but around the world," Biden said this afternoon.
Current gas prices in the United States average $3.40 per gallon, while Biden said countries throughout Europe and Asia are seeing record-high prices at nearly $5 a gallon.
“As we come out of an unprecedented global economic shutdown, oil supply has not kept up with demand, forcing working families and businesses to pay the price,” Secretary of Energy Jennifer Granholm said in a statement. “This action underscores the president’s commitment to using the tools available to bring down costs for working families and to continue our economic recovery.”
About 18 million of the barrels were previously approved by Congress to be released into the market gradually, with Biden's announcement merely speeding up the timeline.
The White House noted Tuesday that oil prices declined 10% just on the early reports about the United States and international partners planning to release more oil into the market.
While consumers wait to see that price drop for suppliers bring down costs at the pump, Biden called on the Federal Trade Commission to investigate whether illegal and anticompetitive behavior by oil and gas companies are to blame for the current prices.
“If the gap between wholesale and retail gas prices was in line with past averages, Americans would be paying at least 25 cents per gallon right now. Instead, companies are pocketing the difference as profit,” Biden said.
The effects of the reserve release won't be seen immediately, but Biden said consumers should expect to see lower prices in the months ahead.
His announcement comes as the U.S. continues to grapple with historic rates of inflation, with consumer prices hitting a 31-year high this past October.
Biden has touted his massive $1.2 trillion infrastructure bill as a long-term solution to inflationary pressures, despite criticism from Republicans.
As for how the introduction of more oil into the market aligns with his campaign promise to combat climate change, the president said he is balancing the mitigation of financial hardships for Americans now while remaining committed to a future in which the United States has transitioned to rely on clean energy.
"In the longer term, we will reduce our reliance on oil as we shift to clean energy, but right now I will do what needs to be done to reduce the price you pay at the pump," Biden said.
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