President Joe Biden announced on Tuesday that his Department of Energy plans to release 50 million gallons of crude oil from the U.S. strategic reserve in an attempt to ease shortages and overcome OPEC refusals to increase production.
The release will involve an additional 32 million gallons of crude oil in addition to 18 million gallons already scheduled to be sold in a separate deal by Congress, which will now be accelerated.
Along with the U.S., China, India, Japan, South Korea and the United Kingdom will also tap into their reserves in much smaller amounts.
Energy price increases were responsible for driving the majority of a 30-year record inflation spike in consumer prices, with a 4.6% increase just in the month of October. Consumers are bracing for significant increases in home heating costs, with both natural gas and oil seeing double-digit increases over last year.
Biden trying to boost poll numbers
Inflation is widely believed to be a major reason why Biden’s poll numbers are tanking. Biden has been saying that the price increases are just temporary because of the economic recovery from the pandemic, but other experts disagree.
For one thing, the Federal Reserve said it will begin to taper off its bond-buying and other measures intended to prop up the economy during the COVID-19 pandemic, and may raise interest rates earlier than expected.
In addition, economic experts have long said that printing trillions of dollars and adding to the country’s debt are a recipe for inflation. Now we are seeing that exact thing happen.
The U.S. as a whole uses between 19 and 20 million barrels of oil each day to power its cars, homes, businesses and infrastructure.
The U.S. strategic reserve contains a total of 605 million barrels, so the 50 million barrels is around 8.5% of that total.
How it works
The release will be through sales to businesses, and part of the deal is for the U.S. to be able to have the 32 million barrels returned to it over time.
While it isn’t immediately clear whether the release of oil will have a big impact on gas prices, if it can ease ongoing shortages and boost supply, it may be able to have an effect.
Gas prices are averaging $3.40 a gallon heading into Thanksgiving, when many people travel to see family.
The post Biden to release 50 million barrels of oil from strategic reserve first appeared on Conservative Institute.
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