President Biden made a historic call by releasing one million barrels of oil a day. The move is towards helping reduce the gas prices for the next month.
Will oil release help reduce gas prices?
On Thursday, President Biden revealed that he will be hitting the US Strategic Petroleum Reserve to release one million barrels of oil every day for the next six months. The move comes as Americans face staggering gas prices. However, he stated that he does not know how much gas prices will reduce or how long it will take. “My guess is we’ll see it come down and continue to come down, but how far down, I don’t think anyone can tell,” said president Biden.
“And there’s gonna be a slight delay because if you go out there and you’re a gas station and you purchase ‘X’ amount of gas at a certain price, you’re not going to lower the price at the pump until you’re able to get back what you’d invested. And I’m talking a matter of days and weeks, but it’s hard to tell. But it will come down. And it could come down fairly significantly. It could come down, the better part of, anything from 10 cents to 35 cents a gallon. It’s unknown at this point,” he added.
How will this move help the US?
The sudden skyrocketing gas prices over the last month are the inflation and the war between Ukraine and Russia. Additionally, Republicans believe that the Biden Administration’s policies are harming oil production in America and their energy independence. “The scale of this release is unprecedented: the world has never had a release of oil reserves at this 1 million per day rate for this length of time. This record release will provide a historic amount of supply to serve as a bridge until the end of the year when domestic production ramps up,” stated the White House. “Companies that are producing from their leased acres and existing wells will not face higher fees. But companies that continue to sit on non-producing acres will have to choose whether to start producing or pay a fee for each idled well and unused acre,” they added.
Currently, gas prices are falling at the pump. While it is not cheap, it is less than what it was at its peak. The US consumes about 20.6 million barrels of oil every day. hence, one million barrels a day is lesser than what the nation consumes. Every day, the world consumes roughly 100 million barrels of oil. “This plan will probably cause some relief, ultimately, at the pump. We see the price per barrel coming down today on the market because of this pending announcement,” stated Dan Geltrude. Geltrude is the founder of Geltrude & Co., a financial consulting firm. “This to me is a Band-Aid. And we have to look at a longer-term solution,” he added.
