Biden's Crude Measures

The United States Strategic Petroleum Reserve (SPR) is at its lowest level since 1984, as the U.S. has been steadily depleting it since 2016. The SPR was first created in 1975 in response to the 1973 oil crisis, to ensure the U.S. would never go without oil in case of foreign interruptions again. Biden is now is looking to refill that reserve.

The Biden administration is hoping to balance a surge in oil prices against a crash in oil prices in an effort to make both consumers and the U.S.-based oil sector happy by strategic releases of the oil reserve. Since the beginning of the year, the Biden administration has dropped the SPR from 600 million barrels down to just 442 million barrels. This was in an effort to protect consumers from inflated prices following Russia’s special military operation in Ukraine.

In March, the Biden administration released a historic amount of 180 million barrels from the SPR in an effort to reduce oil and gas prices for American consumers. And just last week, the West Texas Intermediate (WTI) dropped to about $81 a barrel.

Due to the move, gas prices have fallen from $5 a gallon in June to around $3.71 a gallon as of this week. If oil drops to around $80 a barrel, the Biden administration may purchase more than 100 million barrels in order to refill the SPR, as was reported by Bloomberg on Tuesday. If they do, gas prices may stop falling and finally hit their floor until the SPR is finished being filled.