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President Joe Biden taps millions of barrels of oil reserves to lower prices

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President Joe Biden speaks Thursday at the White House announcing he will release millions of barrels of oil from the U.S. reserve supply to help lower gas prices. Biden called for short-term price relief at the pump while working on a longer term plan to build a made in America clean energy future that ends oil dependence. Photo by Bonnie Cash/UPI<br> | <a href="/News_Photos/lp/88a533cb8fb975f7bcd54c932fc53b51/" target="_blank">License Photo</a>
President Joe Biden speaks Thursday at the White House announcing he will release millions of barrels of oil from the U.S. reserve supply to help lower gas prices. Biden called for short-term price relief at the pump while working on a longer term plan to build a made in America clean energy future that ends oil dependence. Photo by Bonnie Cash/UPI
| License Photo

March 31 (UPI) -- As the cost of gasoline remains above $4 per gallon across the United States, President Joe Biden on Thursday ordered the release of an extra 1 million barrels of oil per day from the nation's strategic petroleum reserve.

Biden's order said the extra oil will come out of the reserve for six months and total 180 million barrels. He officially announced the move Thursday afternoon at the White House.

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It's believed that the release is the largest ever for the U.S. strategic oil reserve.

"I know how much it hurts," Biden said about the high gas prices at the pump Thursday.

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As Biden announced the oil reserves release he also had a direct message for U.S. oil companies.

"This is not the time to sit on record profits," Biden said in a live video streamed address Thursday. "It's time to step up for the good of your country, for the good of the world, to invest in the increased production we need to respond to Vladimir Putin."

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He said no company should take advantage of Vladimir Putin's actions to enrich themselves at the expense of American families.

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The president said this is "a moment of consequence and peril for the world and pain at the pump for American families." He said it's also a moment of patriotism.

Biden said high gas prices were caused by the collapse of demand for oil during the pandemic that led to production cuts, followed by a quick resurgence in demand during the U.S. economic recovery from the pandemic.

And he said the Russian president is contributing to high gas prices now.

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Biden has blamed Russian President Vladimir Putin for the "hike on energy prices" because of the war in Ukraine, which has led to a chain reaction of disruptions in the global energy sector.

Earlier this month, he announced an embargo of Russian-produced oil that banned imports in the United States.

"Our prices are rising because of Putin's actions. There isn't enough supply. And the bottom line is if we want lower gas prices we need to have more oil supply right now," Biden said during his announcement.

"Family budgets to fill a tank -- none of it should hinge on whether a dictator declares war."

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While experts say the ban has had some effect on U.S. prices, the effect is limited because Russian oil has traditionally accounted for a small portion of domestic gas imports.

Biden also issued a directive Thursday using powers from the Defense Production Act to "secure American supply chains for vital components that go into batteries for EV's."

He said the U.S. needs to end reliance on China and other countries for the lithium, graphite, nickel and other vital resources needed "to power a clean energy future."

He said America needs to end reliance on other countries while building a "Made in America" clean energy future. Biden said the nation can get there by ramping up energy production in the short term while working on longer term plans to end oil dependence.

He urged Congress to pass a "use it or lose it" policy on oil drilling leases that companies have been sitting on for years. He wants Congress to impose a fee on companies that have unused oil leases on federal lands.

Biden called on Congress to get behind his proposal for a made in America clean energy future, saying it's good for national security.

It's estimated that the strategic U.S. reserve -- an emergency stockpile of oil stored in underground tanks in the Gulf Coast area -- has about 560 million barrels and the government rarely taps it unless prompted by an emergency.

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The reserve can hold more than 700 million barrels.

Gas prices in the United States have seen a wild swing upward over the past few months -- due mainly to rising inflation, analysts say, and partly due to the Russian war in Ukraine.

According to AAA, the national average is presently $4.22 per gallon -- up from $3.61 a month ago and $2.87 a year ago.

The cost of Brent crude, which is the international benchmark, was about $105 per barrel at the start of Thursday -- and West Texas Intermediate, the U.S. benchmark, was about $101. File Photo by John Angelillo/UPI

California has the United States' most expensive gas at about $5.90 per gallon, followed by Nevada ($5.24) and Hawaii ($5.20). The least expensive gas is in the Midwest. A number of factors influence the cost of gasoline at the pump -- mainly state taxes and proximity to refineries.

Reports of Biden's move had a swift impact on oil futures on Wall Street early Thursday.

May futures for Brent crude, the international benchmark, declined to around $107 per barrel by late Thursday morning -- and futures for West Texas Intermediate, the U.S. benchmark, also slid to about $102.

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The website Gas Buddy said on Wednesday that U.S. crude oil inventories have decreased by 3.4 million barrels to about 410 million, or about 14% below the five-year average for this time of year.

The president made a similar move last fall and ordered 50 million barrels from the strategic reserve to stabilize gas prices. At the time, Biden noted that the extra oil "will not solve the problem of high gas prices overnight."

"It will take time, but before long, you should see the price of gas drop where you fill up your tank," he said. "And in the longer term, we will reduce our reliance on oil as we shift to clean energy."

This Week in Washington

Jared Bernstein (R), member of the Council of Economic Advisers, joined by Jen Psaki, White House press secretary, speaks during a news conference in the James S. Brady Press Briefing Room on Friday. Photo by Oliver Contreras/UPI | License Photo

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