(NEXSTAR) - President Joe Biden is ordering the release of 1 million barrels of oil per day from the nation’s strategic petroleum reserve for six months in a bid to control energy prices that have spiked amid Russia’s invasion of Ukraine.
While gas prices were already on the rise at the start of 2022, they jumped dramatically following Russia's invasion, AAA shows. They've since stabilized, but the national average remains well above $4 (AAA is reporting the average for a gallon of regular gas sits at $4.22 as of Thursday). Energy prices have also spiked as the U.S. and its allies rolled out a plethora of sanctions against the Russian government and oligarchs.
The planned release from the strategic reserve is a way to increase supplies as a bridge until oil companies ramp up their own production, with administration officials estimating that domestic production will grow by 1 million barrels daily this year and an additional 700,000 barrels daily in 2023.
What is the strategic reserve?
It's the world's largest supply of emergency crude oil, according to the Department of Energy. The Strategic Petroleum Reserve, or SPR, was created after the Arab oil embargo in the 1970s, according to Bloomberg, and is stored in deep and heavily guarded underground salt caverns along the Gulf Coast.
The strategic reserve can house up to 713.5 million barrels of crude oil but previously had a capacity of 727 million barrels. The most it has ever held was 726.6 million barrels. As of March 25, it's holding more than 568 million barrels.
Tapping the reserve is among the few things a president can do alone to try to control inflation. According to the Department of Energy, the reserve is always "drawdown ready," meaning it can release crude oil to the market within 13 days of the president's direction.
Biden's six-month timeframe will begin in May, according to a Bloomberg report, meaning as many as 180 million barrels will be released from the strategic reserve. That means that even if the U.S. doesn't add any barrels to the reserve, and no additional releases are ordered, there would still be roughly 388 million barrels in the emergency stock.
This release of oil reserves is the largest the world has ever seen, a statement from the White House reads. The Department of Energy will use the revenue from this release to restock the Strategic Petroleum Reserve in future years, once prices have fallen sufficiently.
Ultimately, officials hope the release of reserves will create pressures that may lead to reduced oil prices, though Biden has already twice ordered releases from the strategic reserves without causing a meaningful shift in oil markets. During a Thursday press conference, Biden said the price at the pump could come down anywhere between 10 cents and 35 cents per gallon.
The Associated Press and NewsNation's Sydney Kalich contributed to this report.
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