HOUSTON — The United States is tapping into its oil reserves in an effort to fight skyrocketing gas prices ahead of the holidays. Right now, the national average sits at $3.40. That’s up $1.29 from this time last year.
Tuesday morning, President Joe Biden announced 50 million barrels of oil will be made available from the Strategic Petroleum Reserve to lower prices.
The White House will release 50 million barrels from its stockpile in coordination with other oil-consuming countries like China, India, Japan and the United Kingdom to keep up with demand.
What you need to know
- Gas prices are at about $3.40 a gallon, more than double their price a year ago, according to the American Automobile Association
- Americans used an average of 20.7 million barrels a day during September, according to the Energy Information Administration
- 32 million barrels will be released in the next few months, according to the White House
- Another 18 barrels will be part of a sale of oil that Congress had previously authorized
How many barrels of oil are used per day?
Local energy experts warn the release is only a short-term fix. The pain of filling up at the pump isn’t going away anytime soon.
“This may lower the price for a little while into the new year. We won’t see a full impact at the pump until maybe Christmas time,” KHOU 11 energy expert Ed Hirs said. “It just takes that long to have the impact reach the market.”
Hirs says the 50 million barrels of oil that will be use will be just a drop in the bucket of what’s needed when you calculate the more than 20 million barrels of oil Americans use every day.
“We can’t keep doing this for an extended period of time. We’ll run out,” he said. “Daily world consumption is 100 million barrels a day and the U.S. has 600 million in reserve.”
Where are the U.S. oil reserves located?
The Strategic Petroleum Reserve is an emergency stockpile to preserve access to oil in case of natural disasters, national security issues and other events.
Maintained by the Energy Department, the reserves are stored in caverns created in salt domes along the Texas and Louisiana Gulf Coasts.
There are roughly 605 million barrels of sweet and sour petroleum in the reserve.
OPEC has the power to control prices
Hirs says people in Houston won’t see much of a change before Thanksgiving.
Sadly, he says the Organization of the Petrolum Exporting Countries— or OPEC — have the power to control prices.
“If OPEC plus wants to out-wait them they can just dial back production today and six months from now when we’ve exhausted our ability to offer any extra reserves they can come back into the market at a much higher price.”