Why Joe Biden is releasing 50m barrels of oil 

In a move to

In a move to combat high petrol prices and rising inflation, the
White House has announced that the US Department of Energy will
release 50m barrels of oil from the Strategic Petroleum
Reserve.

When delivering a speech on the US economy in Washington D.C.
yesterday, Joe Biden said that the action has been taken to help
“lower the cost of gas and oil for American families”. 

In a series of tweets^[1], the US president added
that he has been working with countries across the world to
“address the lack of supply” and as a result of diplomatic efforts
“this step will be taken in parallel with other major energy
consuming nations”, including China, India, Japan, Republic of
Korea and the UK.

The release of 50m barrels of oil is the largest from the
reserve in US history. However, the administration’s actions “will
not solve the problem of high gas prices overnight”, Biden warned.
“It will take time, but before long, you should see the price of
gas drop where you fill up your tank. And in the longer term, we
will reduce our reliance on oil as we shift to clean energy.”

The Strategic Petroleum Reserve is an “emergency stockpile to
preserve access to oil in case of natural disasters, national
security issues and other events”, The Guardian^[2] reported. Former
president Donald Trump^[3] claimed credit for
filling the reserve and opposed Biden’s move. He said the reserves
are “meant to be used for serious emergencies, like war, and
nothing else”.

‘Biggest inflation spike’

The move comes as the White House faces “mounting pressure to
lower skyrocketing prices at the pump”, CNN^[4]
said. According to data from the American Automobile Association,
US gasoline prices are averaging about $3.40 a gallon, more than
double their price a year ago. The high prices have contributed to
the “biggest inflation spike in decades” and caused “frustration
and anger among Americans”. 

Last Friday there were 604.5m barrels of oil in the Strategic
Petroleum Reserve, according to the Department of Energy. And while
the release is aimed at addressing the lack of oil supply around
the world, its actual effect “may be limited”, CNN added. 

The oil barrels that are part of the announcement are not
expected to hit the market until “mid to late December, depending
on market take up”, a senior administration official said.

Paying the price 

Biden has “scrambled” to reshape much of his economic agenda
around the issue of inflation, The Guardian reported. The president
recently passed a $1.2tn infrastructure package that will “reduce
price pressures by making it more efficient and cheaper to
transport goods”.

Jennifer Granholm, the US secretary of energy, said that after
coming out of an “unprecedented global economic shutdown” due to
the Covid-19 pandemic, “oil supply has not kept up with demand,
forcing working families and businesses to pay the price”. She
added: “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.”

However, Mitch McConnell, the Senate Republican leader, “tore
into the White House” last week, saying the victims of higher
prices were middle-class Americans, The Guardian added.

“The three biggest drivers of the staggering 6.2% inflation rate
we logged last month were housing, transportation and food,” he
said. “Those aren’t luxuries, they’re essentials, and they take up
a much bigger share of families’ budgets from the middle class on
down.”