President Joe Biden has ordered a major and unprecedented release of oil reserves in order to help bring down the high costs of fuel, BBC reports.
Biden has released from America’s oil reserves up to 180 million barrels of oil over the next six months, making it the largest release since the reserve was first created in 1974.
Oil prices dropped after reporters came out of the release.
There has been a huge supply crunch since Russia invaded Ukraine.
However, the release of the oil reserves, which will equal about 1 million barrels a day, is unlikely to be able to completely and fully resolve the energy crisis.
Biden promised that further action would be taken in order to boost U.S. output, saying that the release was being ordered as a “bridge” until the end of the year, which is when domestic production will have ramped up by.
The release from the Strategic Petroleum Reserve will amount to less than two days of global consumption. Biden said the huge release was “unprecedented.”
Biden also called for companies to pay extra if they chose not to use oil wells on land that they leased from the U.S. government. He also said investments were needed to speed up the adoption of greener energy sources.
After Biden’s remarks, U.S. oil benchmark West Texas Intermediate was more than 7 percent lower, coming in at about $100 a barrel. The Brent Crude fell roughly 5.4 percent as well, to about $107 a barrel.
Fuel has been skyrocketing in price and has become a major political issue around the world. No place more so than in the United States, which has deeply politicized the issue, especially with midterm elections approaching in November.
America’s Strategic Petroleum Reserve was created after the massive energy crisis in the 1970s. It is located in the Gulf Coast in Texas and Louisiana in storage caverns in salt domes. As of March 25, it held about 568 million barrels. At its peak in 2009, it held more than 700 million barrels.