Biden says the US will tap strategic oil reserves as gas prices hover around 7 points.

President Joe Biden speaks at the signing ceremony of the Infrastructure Investment and Jobs Act on the South Lawn at the White House in Washington, DC, November 15, 2021.

Jonathan Ernst | Reuters

President Joe Biden said on Tuesday that the administration will leverage the Strategic Oil Reserve as part of a global effort by energy-consuming countries to contain rapid fuel price increases in 2021.

Coordinated release between the United States, India, China, Japan, the Republic of Korea and the United Kingdom is the first such step.

In total, the US will release 50 million barrels from the SPR. Of the total, 32 million barrels will be exchanged over the next few months, and 18 million barrels will accelerate the previously authorized sale.

“The President is ready to take additional action if necessary and is willing to use all of his powers, working in coordination with the rest of the world, to maintain adequate supplies as we emerge from the pandemic,” the White House said in a statement.

The announcement on Tuesday followed the administration for months saying it was looking into its tools as West Texas Intermediate crude oil futures soared to a seven-year high above $ 85.

Gas station prices have followed the rise and are currently hovering around their highest level in seven years. The national average per gallon of gas was $ 3.409 on Monday, up from $ 2.11 a year ago, according to AAA data.

As of November 19, SPR held 604.5 million barrels of spreads across four sites, according to the Department of Energy. Oil will enter the market 13 days after the president’s announcement, according to DofE.

In total, SPR, which was founded in 1975 after the Arab oil embargo, can store 727 million barrels.

According to DofE, SPR can be used in three ways: full drawdown to counter “severe power outages”, limited drawdown to 30 million barrels, or drawdown for an exchange or test sell.

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