The Biden administration last week authorized the release of a record 50 million barrels of crude oil from the U.S. Strategic Petroleum Reserve, but experts who spoke with Newsweek say the move is unlikely to help with lowering gasoline prices.
“One needs to be careful to directly equate a relatively minimal release of oil reserves to lower gasoline prices,” Philip Walsh, professor of entrepreneurship and strategy at Ryerson University in Toronto and principal investigator at the university’s Center for Urban Energy, told Newsweek.
“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. Heating oil and oil-fired power generation will also compete for that surplus supply,” he said.
Gasoline prices, he added, “are influenced by oil prices which are driven by the demand-supply balance.”
“So 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,” he added.
Biden’s decision was “an intervention in the market with an instrument designed for reduced or interrupted energy supplies,” Professor Dirk Buschle, Iberdrola Manuel Marin chair for European Energy and Climate Policy at the College of Europe in Belgium, told Newsweek.
“As energy prices may remain volatile for some time, governments should be careful in not making this kind of intervention a rule rather than an exception,” he cautioned.
The U.S. action, aimed at global energy markets and helping lower gasoline prices that have risen more than a dollar per gallon since January, will have some impact, says Devin Gladden, a spokesperson for the American Automobile Association.
“Although we will see some incremental decreases, we’re not expecting this to have a long-term impact. But it certainly will have an impact,” Gladden said.