On March 31, 2022 — in an attempt to fight higher oil and gasoline prices — President Biden announced the release of one million barrels of crude oil a day for six months from the SPR.
I remember when I first heard about it, I thought “Wow. That’s a lot.” In fact, I noted in interviews at the time that this level of release would likely help stem oil prices — at the risk of depleting our insurance policy in case of a supply disruption.
Consider that with the U.S. producing 12 million BPD, an extra one million BPD pushes total U.S. “supply” (which isn’t sustainable, because it relies on depleting the SPR) back up to the all-time pre-Covid high of 13 million BPD.
Ultimately, drawing down the SPR was a political decision. Think about it. An administration that has frequently emphasized the importance of reducing carbon emissions is trying to increase oil supplies to bring down rising oil prices — which will in turn help keep demand (and carbon emissions) high.
But even though the Biden Administration wants to address rising carbon emissions, high gasoline prices cause incumbents to lose elections. So, they try to tame gasoline prices even though it contradicts one of their key objectives of reducing carbon emissions.
The SPR has now been depleted since President Biden took office from 640 million barrels to 450 million barrels.