To combat rising gas prices, increasing demand and insufficient oil supply amid the, President Biden on Tuesday announced the US will tap into the country's strategic oil reserves. The move comes in conjunction with other major countries around the world including China, India, Japan, South Korea and the United Kingdom.
The White House said Biden's decision will release 50 million barrels of oil into the supply to help reduce the cost of gas at the pump. It will also lower costs for heating homes and businesses this winter. Of those 50 million barrels, 32 million will be released in the next several months as part of an exchange program, ensuring the oil matches the needs of the US today while pledging to return it to reserves in the future. The other 18 million barrels, which Congress had previously authorized to sell, will see their sale pushed forward in coming months.
The rising prices at fuel pumps across the US follows a massiveamid the COVID-19 pandemic last year where oil . Too much supply and so little demand crashed the oil market. This year, however, as increased and governments relaxed restrictions, more people are eager to travel by car and plane, which both require fuel. As oil demand skyrockets, supply hasn't returned to pre-pandemic levels. A nationwide shortage of fuel tanker drivers hasn't helped the situation, as there are fewer truckers to deliver what supply there is.
The White House added in its announcement that declines in oil prices (after a slight dip in the market a few weeks ago) hasn't exactly reflected in the price per gallon at the pump. The Biden administration has since directed the Federal Trade Commission to examine the markets and see "whether illegal conduct is costing families at the pump." As of today, AAA says the national average for a gallon of regular unleaded fuel is $3.40. Last year, the national average sat below $2 per gallon.