Will Gas Prices Go Down? Biden's 'Historic' Oil Release Aims for Relief

President Joe Biden will make a historic release from the Strategic Petroleum Reserve as gas prices remain high throughout the U.S.

The administration will put 1 million additional barrels of oil on the market daily, the White House said in a statement. The extra barrels will be released every day for the next six months.

"The scale of this release is unprecedented: the world has never had a release of oil reserves at this 1 million per day rate for this length of time," the White House said in a statement. "This record release will provide a historic amount of supply to serve as [a] bridge until the end of the year when domestic production ramps up."

The cost of gas has skyrocketed over the past month amid inflation and the Russia-Ukraine war. Americans have placed most of the blame on the Biden administration, and Republicans have hit the administration over policies they say harm U.S. oil production and energy independence.

"This plan will probably cause some relief, ultimately, at the pump," Dan Geltrude, founder of the financial consulting firm Geltrude & Co., told Newsweek. "We see the price per barrel coming down today on the market because of this pending announcement."

Futures for West Texas Intermediate, which serves as the U.S. reference point for oil prices, fell 3.35 percent on Thursday to $103 per barrel. A majority of the costs imposed at the pump are derived from the price of crude oil.

But Geltrude warned the relief will only be temporary. "This to me is a Band-Aid," he said, "and we have to really look at a longer-term solution."

GasBuddy's Patrick De Haan echoed that sentiment, writing on Twitter that the Strategic Petroleum Reserve release is "short term gain, long term pain."

Will Gas Prices Decrease After Biden Announcement?
President Joe Biden is ordering a historic release from the Strategic Petroleum Reserve as gas prices remain high throughout the U.S. Above, a worker pumps free gas for a motorist at a gas station in Chicago's Humboldt Park neighborhood on March 17. Scott Olson/GETTY IMAGES

The national average for a gallon of gas was $4.225 as of March 31, according to AAA.

Prices at the pump have somewhat stabilized since spiking earlier this month and reaching a record-high $4.33 per gallon. But they are still 60 cents higher than just a month ago and $1.38 higher than the average price this time last year.

"Prices have been falling at the pump," AAA spokesperson Andrew Gross told Newsweek. "It's not exactly cheap, but at least it's down more than a dime since its peak."

A previous move by the administration to release oil from the emergency reserve in November 2021 did lower prices at the pump but only slightly. Gross noted that the price per gallon fell from $3.40 on November 23, the day the administration announced the release, to $3.28 by the end of the year.

The White House has touted the release as "historic," but experts noted that 1 million barrels per day, or 180 million total over the six months, is far less than what Americans consume. The U.S. consumes an average of 20.6 million barrels of oil a day, while the global consumption of oil is roughly 100 million barrels daily.

"When you put that in perspective, that's two days of the world usage," Geltrude said of the release.

The administration is also looking for Congress to take action against oil companies that are not using their drilling permits. There were 9,173 approved permits to drill as of December 31, 2021, according to the Bureau of Land Management. Oil companies have argued that there's more red tape holding them back.

"Today, President Biden is calling on Congress to make companies pay fees on wells from their leases that they haven't used in years and on acres of public lands that they are hoarding without producing," the White House said.

"Companies that are producing from their leased acres and existing wells will not face higher fees. But companies that continue to sit on non-producing acres will have to choose whether to start producing or pay a fee for each idled well and unused acre," the administration added.