Biden administration to release 1 million barrels of gasoline

The Biden administration announced Tuesday that it would sell a million barrels of gasoline in the coming weeks from a strategic reserve in the Northeast, a move it said was aimed at keeping oil prices down. gasoline under control for consumers before the July 4 holiday.

The sale of government-owned stock was mandated by Congress in the spending bill passed in March and will result in the closure of the reserve, which has facilities in the New York Harbor region and Maine. The gasoline will be allocated in quantities of 100,000 barrels, which will be sold through a competitive bidding process, and has been “structured to maximize its impact on gasoline prices” by timing it between on Memorial Day and Independence Day, the Department of Energy statement said.

“The Biden-Harris Administration is focused on lowering prices at the pump for American families, especially as drivers hit the road for the summer driving season,” said Jennifer M. Granholm, Secretary of State. ‘Energy, in the press release.

In practical terms, this decision is unlikely to have a significant impact on gasoline prices, because even one million barrels – or about 42 million gallons – is only a fraction of the total gasoline used in the US. United States, or even in the Northeast. in a single day.

Last year, the United States consumed an average of about nine million barrels of gasoline per day, according to the Energy Information Administration, a division of the Department of Energy. The Northeast and Mid-Atlantic regions accounted for about 2.5 million barrels, according to an analysis by ClearView Energy Partners, a Washington-based research firm.

In the past, President Biden, without prompting from Congress, has relied on energy reserves in an effort to lower prices at the pump.

Shortly after Russia’s invasion of Ukraine in 2022, the White House released a plan to tap into the strategic oil reserve, authorizing the sale of more than 100 million barrels of oil in an effort to stabilize gasoline prices. The Energy Ministry has slowly rebuilt reserves this year, although it canceled a planned purchase of three million barrels last month after prices rose.

“This builds on other actions by President Biden to reduce gas and energy costs – including historic releases of the Strategic Petroleum Reserve and the largest-ever investment in clean energy,” White House press secretary Karine Jean-Pierre said in a statement. .

The New England gasoline reserve was created in the wake of energy shortages caused by Hurricane Sandy in October 2012. But the limited shelf life of gasoline and other factors limited the practical value of the reserve.

Demand for gasoline tends to peak in the summer, when people travel more and drive longer distances.

Gasoline prices have moderated in recent weeks, largely due to the recent drop in oil prices, falling to an average of about $3.60 per gallon on Tuesday, down from $3.67 per gallon a year ago. months earlier, according to AAA data.

Prices have fallen largely because forecasters believe global oil demand will be weaker this year than expected. In addition, traders’ fears that the war in Gaza would cause significant disruption to Middle East oil supplies have eased.

Vikas Bajaj contributed reporting from New York and Brad Plumer of Washington.