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Biden will release another 15 million barrels from the strategic petroleum reserve

LEILA FADEL, HOST:

With midterm voting already underway, President Biden is facing pressure to get high gas prices down. They surged after Russia invaded Ukraine, then slowly dropped over the summer.

A MARTINEZ, HOST:

But OPEC and Russia announced a production cut. So this afternoon, the president will announce what his administration is doing to try to temper prices.

FADEL: Joining us now is NPR political reporter Deepa Shivaram. Hi, Deepa.

DEEPA SHIVARAM, BYLINE: Hey there.

FADEL: So what's the president going to say about the moves he's making?

SHIVARAM: Yeah, the president is going to announce the release of 15 million barrels of oil from what's called the Strategic Petroleum Reserve. That's the stockpile of oil that the U.S. has. And that release will happen in December, with about 500,000 barrels per day coming into the market. The White House says that this release will help to make sure that gas prices don't spike up, even with variables like Russia's actions in Ukraine. And this release is related to an announcement that the administration made back in March, when they said that they would release 180 million barrels from the stockpile over several months, which was the largest release ever. This 15 million number is included in that 180 million original number.

FADEL: OK. So what he's announcing is not new. Is there something new here?

SHIVARAM: Yeah, that's true. There's no new number here because this upcoming 15 million was already anticipated. But a senior administration official told reporters last night that the president had directed his top economic officials to be in a high state of readiness and prepared to go beyond the 180 million barrels if necessary to keep prices stable. Overall, though, this announcement isn't that significant. And it won't really have much of an impact on gas prices either. I spoke with Jay Hakes, the former head of the Energy Information Administration, about it.

JAY HAKES: We're talking about fairly small potatoes here with putting 15 million barrels into the market. And I think the market was probably expecting that to happen anyway.

SHIVARAM: Hakes told me that this announcement doesn't move the needle too much on pricing. But he did say, overall, the release of the 180 million barrels did help people get through what he calls a rough patch from earlier this summer when gas prices were higher. He also said that this move from the administration could be interpreted as pushback on OPEC+, which recently said they would slash oil production by 2 million barrels per day. And he said that with this announcement, the administration is signaling to OPEC, you know, hey, look; we have tools at our disposal, too.

FADEL: So these stockpiles are there for times of natural disasters, huge supply shocks. Are they going to be refilled for a future emergency?

SHIVARAM: Yeah. White House officials said there are about 400 million barrels of oil remaining in the stockpile after the 180 million barrels are drawn out. That's a four-decade low. And the White House says they do have a plan to refill the reserve. They want to buy back the oil once prices fall below $72 per barrel. That's about $10 less than what it costs now. Officials say that the amount would give domestic producers some certainty so that they can keep pumping oil. But the exact timeline on when and how that process would happen is still a little unclear.

In the meantime, the president in his speech is going to call on oil and gas companies to pass their savings onto consumers. And this is all happening just weeks before voting ends in the midterm elections. With inflation and the economy being top issues for voters this year, Biden and Democrats want to come out ahead on any actions they're taking to level out costs.

FADEL: NPR's Deepa Shivaram. Thank you so much.

SHIVARAM: Thank you. Transcript provided by NPR, Copyright NPR.

Leila Fadel is a national correspondent for NPR based in Los Angeles, covering issues of culture, diversity, and race.
Deepa Shivaram is a multi-platform political reporter on NPR's Washington Desk.