Oil prices went below $80 a barrel today, with speculation that President Biden could release oil from the U.S. Strategic Petroleum Reserves. On Sunday, Senate Majority Leader, Charles Schumer asked the Biden administration to tap into the reserve before the holiday season. “We’re here today because we need immediate relief at the gas pumps and the place to look is the Strategic Petroleum Reserve,” Schumer said at the press conference yesterday. Some experts feel the only way for long term relief is through increased production, and that using the reserve is only a short-term solution.
The Strategic Petroleum Reserve is off the coast of Texas and Louisiana in caverns. The Reserve currently contains 621 million barrels, which equates to 36 days if we were faced with a situation where the oil had to be released all at once. The average price paid for oil in the reserve is $29.70 per barrel. It’s estimated that once the President gives approval to tap into the Reserve, it will take 13 days for that oil to enter the U.S. market. The last time a President used any of the oil from the Reserve was in 2011. At that time there was tension in Libya that caused oil supply disruption, so President Barack Obama sold 30.6 million barrels from it.