By Yasin Ebrahim

Investing.com – President Joe Biden announced Thursday the historic release of 1 million barrels a day from the U.S. strategic petroleum reserve to curb the surge in oil prices and reduce pain at the pump for Americans.   

Biden declared, “Today, 1 million barrels per daily will be released from the Strategic Petroleum Reserve for the next 6 months. This is more than 180,000,000 barrels.” 

This would happen in conjunction with other countries. The combined efforts could see supply increase “well over a million barrels a day.”

Commerzbank claimed that the release of record amounts of supply, if it is realized, would “push reserves to their lowest level for almost 40 years.” But, President Trump suggested that the U.S. would replenish oil supplies when prices fall. 

Biden stated, “A six-month bridge to the fall. We’ll use revenue from selling crude oil now to replenish the Strategic Petroleum Reserve when the prices drop.” 

According to the president, it is difficult to predict how much gas prices will fall due to the release. This would depend on how many barrels other countries decide to release in the coordination effort.   Biden speculated that the release could be triggered by other countries releasing “anywhere from 30 million to 50,000,000 barrels”. Biden stated that the higher the number, the greater the likelihood of prices rising.

Market experts suggest that 180 million barrels of oil could be released to increase supply, which would cause prices to drop.   

“If such a gigantic release of emergency reserves actually happens, the oil market would no longer be undersupplied in the second quarter, and would even be oversupplied in the third quarter based on the IEA’s current forecasts,” Commerzbank said in a note.