Search quotes, news & videos WATCHLIST | SIGN IN


 MARKETS BUSINESS INVESTING TECH POLITICS CNBC TV INVESTING CLUB PRO MAKE IT  USA • INTL

POLI T I C S

U.S. to release 1 million barrels of oil

per day from reserves to help cut gas
prices
Thomas Franck
@ TO M W F R A N C K

TV

WATCH LIVE
KEY The Biden administration on Thursday said the U.S. will release 1 million barrels of
POINTS oil per day from reserves. UP NEXT | ET Listen

"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," the White House said.

Biden also used the announcement to criticize the domestic energy industry for
"sitting on" 9,000 unused but already approved permits for production.

In this article @CL.1 @LCO.4

VIDEO 13:51

Biden announces U.S. will release 1 million barrels of

oil per day from Strategic Petroleum Reserve

The U.S. will release 1 million barrels of oil per day from its strategic reserves
to help cut gas prices and fight inflation across the country, the White House
announced Thursday.

President Joe Biden plans to tap the nation's Strategic Petroleum Reserve for
the next six months as domestic producers ramp up production, according to a
fact sheet released by the Biden administration.

"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," the White
House said in a release. "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."

A senior administration official told reporters Thursday morning that, in

combination with similar actions in other countries, the average daily amount
released from global strategic reserves should exceed 1 million barrels.

Oil prices dropped Thursday after reports surfaced Wednesday evening

suggesting such a move was imminent.

International benchmark Brent crude futures for May fell 4% to trade at

$108.89 per barrel. U.S. crude futures slid 4.7% to $102.84. Earlier in the
session the contract traded as low as $100.16.

The announcement comes as the White House looks for ways to combat a spike
in energy prices caused by Russia's invasion of Ukraine. While oil prices are
well off highs seen earlier this year, the geopolitical chaos has continued to
elevate petroleum costs and stir fears about oil and natural gas availability.

VIDEO 03:34

White House SPR release helps but is unlikely to solve

problems with oil supply, says Wells Fargo’s Read

Biden later remarked on the administration's efforts to cool oil prices and
blamed Russian President Vladimir Putin for the most recent spike in energy
costs.

"Many people are no longer buying Russian oil around the world. I banned
Russian-imported oil here in America, Republicans and Democrats in
Congress called for it and support it. It was the right thing to do," Biden said.

"But as I said at the time, it's going to come with a cost," the president added.
"As Russian oil comes off the global market, supply of oil drops, and prices are
rising. Now Putin's price hike is hitting Americans at the pump."

The recent rise in crude prices has led to a jump in domestic gasoline prices,
with the national average price of a gallon of gas at $4.23, up from $2.87 a
year ago. That jump has contributed to a broader rise in the prices consumers
pay for all goods and services, and a 7.9% increase in year-over-year inflation.

Roger Read, senior energy analyst at Wells Fargo Securities, noted that Biden's
planned daily release from the SPR is about 1% of daily global production and
5% of U.S consumption.

"I don't want to make it sound like it's nothing, but you just arrive at the issue
where we may be off a lot more than just 1 million barrels. So it helps, but it's
unlikely to solve the problem," he said. "In the end, it's a little bit of a Band Aid
and I think a little bit of hoping to get later in the year OPEC catch up."

The White House also used Thursday's announcement to criticize the domestic
energy industry for "sitting on" more than 12 million acres of federal land and
9,000 unused but already approved permits for production.

Specifically, Biden implored lawmakers to impose fees on companies that

aren't using wells from their leases on acres of public lands.

"Companies that are producing from their leased acres and existing wells will
not face higher fees," the administration said. "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."

CNBC Politics
Read more of CNBC's politics coverage:
• Russia holds onto positions near Kyiv; UK spy chief says
Putin 'massively misjudged' war
• U.S. to release 1 million barrels of oil per day from
reserves to help cut gas prices
• U.S. sanctions global network of firms helping the Russian
military evade export controls

A senior administration official later added that the White House has been
meeting with industry leaders to encourage producers to use already approved
land to ramp up U.S. capacity with mixed feedback.

"We believe the industry needs to step up," the official said. "It needs to do
more, there needs to be investing in additional production."

"There are companies out there that have said they are, that are doing the right
thing," the person added. But there are others "who've said that it doesn't
matter where the price point is, they're not going to produce more. They're
instead focused on returning dividends and distributions to shareholders."

Energy Secretary Jennifer Granholm said in a tweet Thursday afternoon that

her department is immediately ready to deploy the 1 million barrels per day.

The White House said Biden will also urge lawmakers to foster American
energy independence by passing legislation to speed up the transition to clean
energy.

The president also plans to invoke the Defense Production Act to support the
production and processing of minerals and materials used for large capacity
batteries like lithium, nickel, cobalt, graphite and manganese.

"The sectors supported by these large capacity batteries—transportation and

the power sector—account for more than half of our nation's carbon
emissions," the administration said in a fact sheet.

— CNBC's Pippa Stevens contributed reporting.

WATCH LIVE
UP NEXT | ET

      

Subscribe to CNBC PRO Licensing & Reprints CNBC Councils News Tips  CNBC Newsletters
Supply Chain Values CNBC on Peacock Advertise With Us Got a confidential news tip? We want to hear Sign up for free newsletters and get more CNBC
from you. delivered to your inbox
Join the CNBC Panel Digital Products News Releases

Closed Captioning Corrections About CNBC GET IN TOUCH SIGN UP NOW

Internships Site Map Ad Choices Get this delivered to your inbox, and more info about our
products and services. 

Careers Help Contact

Privacy Policy | Do Not Sell My Personal Information | CA Notice | Terms of Service

© 2022 CNBC LLC. All Rights Reserved. A Division of NBCUniversal

Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes, and Market Data and Analysis.

Market Data Terms of Use and Disclaimers

Data also provided by