Biden taps oil reserves to lowest level in four decades

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Biden taps oil reserves to lowest level in four decades

President Biden is tapping into the country's emergency stock of oil, as the White House tries to prevent gasoline prices from spiking again, reducing the petroleum reserve to its lowest level in four decades.

The nation's Strategic Petroleum Reserve had 416.4 million barrels of oil in the week ending Sept. 30, the lowest level since 1984 after the Biden administration released another 6.2 million barrels, according to Department of Energy data.

Biden had tapped the emergency oil stash four times over the past year in hopes of lowering gas prices, including in March, when he ordered 180 million barrels of oil released from the reserve 1 million barrels per day over six months.

The White House said on Wednesday that it would release 10 million barrels of barrels in November, with the releases scheduled to finish this month.

The decision to drain the oil reserves came hours after a coalition of oil-producing countries led by Russia and Saudi Arabia announced 2 million barrels of oil, the first major cut in two years. The move came despite lobbying from U.S. officials to do otherwise threatens to raise oil prices at a time when the world is already combating record-high inflation.

The production cuts, which threaten to push gas prices higher with midterm elections just one month away, have been condemned by the government.

The president is disappointed by the shortsighted decision by OPEC Plus to cut production quotas while the global economy is dealing with the negative impact of Putin's invasion of Ukraine, according to Brian Deese, the director of the National Economic Council, and Jake Sullivan, the national security adviser.

A gallon of gas costs $3.86 on average, according to AAA after hitting a record high of $5.01 per gallon in mid-June.

It is still up 29% from just one year ago, and is a 23% decline from the summer peak.

Proponents of the release of barrels from the emergency stockpile say that doing so increases oil supplies and reduces prices at the pump, while also generating billions in revenue for the federal government. releasing emergency supplies is a short-term fix and does not increase the country's oil production capacity, according to critics.

The reserve was established after a 1973 -- 74 oil embargo by Arab members of the OPEC. It has been used in several emergencies, including in 2005 after Hurricane Katrina made landfall and destroyed swaths of the Gulf of Mexico oil infrastructure. The Bush administration approved the release of 20.8 million barrels of crude oil to U.S. producers at the time.

The plan to replenish the oil reserve was announced earlier this year by the Biden administration, with a call for bids to repurchase 60 million barrels of oil, roughly one-third of the emergency supply released by the president in March.

The call for bids from companies is scheduled to take place in the fall and is intended to bolster emergency supply for future years.

West Texas Intermediate, the U.S. benchmark, rose to $88.45 per barrels on Thursday after the OPEC cuts. The White House had contemplated refilling its emergency oil reserve when crude prices dip below $80 a barrel, according to Bloomberg News.