President Joe Biden recently authorized the release of 50 million barrels of oil from the nation’s strategic reserve amid sharply rising energy costs.
A number of politicians and policy experts, however, advise that the move is not likely to have a prolonged positive impact on prices at the pump.
“Driven by the demand-supply balance”
According to Newsmax, one such critic is Ryerson University professor Philip Walsh.
“One needs to be careful to directly equate a relative minimal release of oil reserves to lower gasoline prices,” he cautioned.
Walsh began his analysis by pointing out that the release of 50 billion gallons of oil is not as much as it might sound.
“First of all, 50 million barrels of oil is less than three days of consumption in the United States and the market for oil is not limited to producing just gasoline,” the professor said. “Heating oil and oil-fired power generation will also compete for that surplus supply.”
He went on to explain that gas prices “are influenced by oil prices which are driven by the demand-supply balance,” meaning that “any short-term impact on gasoline prices from the release of oil from the U.S. Strategic Reserve will be dependent on how quickly that oil gets into the U.S. energy system and at what daily amount.”
“Oil supply has not kept up with demand”
Professor Dirk Buschle of the College of Europe in Belgium similarly noted that the strategic reserve is actually “designed for reduced or interrupted energy supplies” rather than a way to influence market costs.
American Automobile Association spokesperson Devin Gladden offered his take on the matter, echoing the common assertion that Biden’s move will have a short-term impact at best. Nevertheless, the White House seemed adamant that the release of additional oil will help bring the cost of gasoline down.
“American consumers are feeling the impact of elevated gas prices at the pump and in their home heating bills, and American businesses are, too, because oil supply has not kept up with demand as the global economy emerges from the pandemic,” the Biden administration said.
In addition to pushback from Republican lawmakers, Biden’s decision has also been met with skepticism from prominent Democrats.
“Today’s release from the Strategic Petroleum Reserve is an important policy Band-Aid for rising gas prices but does not solve for the self-inflicted wound that shortsighted energy policy is having on our nation,” declared Sen. Joe Manchin (D-WV).