Biden taps U.S. oil reserves to counter rising gas prices

President Biden announced a historic effort to lower gas prices that have skyrocketed since Russia invaded Ukraine. He said the administration would release 180 million barrels of oil from the Strategic Petroleum Reserve over the next six months. At one million barrels per day, that is the largest release in U.S. history. Patrick De Haan, founder of GasBuddy, joins Lisa Desjardins to discuss.

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  • Judy Woodruff:

    As we reported earlier, President Biden announced unprecedented action today to reduce the pain at the gas pump.

    Lisa Desjardins explains.

  • Lisa Desjardins:

    Putin's price hike, that's what President Biden calls the surge in gas prices since Russia invaded Ukraine five weeks ago.

    Today, he announced a historic effort to lower those costs. He said the administration would release 180 million barrels of oil from the Strategic Reserve over the next six months. At one million barrels per day, that is the largest release in U.S. history. And it amounts to roughly a third of the reserve's current supply.

    Joining me now to help us understand what this means is Patrick De Haan. He is the head of petroleum analysis at GasBuddy, an app that tracks fuel prices and shortages.

    Patrick, let's just start right away. How significant is this? What do you make of it?

    Patrick De Haan, Head of Petroleum Analysis, GasBuddy: Well, I think it's very significant.

    It was largely unexpected, surprising, and it's a significant amount of crude oil. Keep in mind that the president had previously announced two other releases of 50 million barrels last fall and 30 million barrels shortly after Russia's war on Ukraine.

    And so to come out just shortly thereafter from the previous announcement, and announce another 180 million barrels, it certainly caught me off-guard.

  • Lisa Desjardins:

    That's the interesting thing. Those previous two releases didn't seem to affect prices or at least didn't bring them down.

    What do you think about this idea? Will this affect prices? The president says 10 cents to 35 cents, but Republican Senate Leader Mitch McConnell calls it a drop in the bucket.

    What do you think?

  • Patrick De Haan:

    Well, I think a drop in the bucket is just dismissing — somebody dismissing the idea that maybe didn't originate with him.

    I think there will be an impact. I don't know if it would be as high as 35 cents. But there's somewhere, a 10-to-25-cent-a-gallon range. What I'm concerned about is that there are plenty of volatile situations, especially Russia and Ukraine, COVID in China, that could eventually offset part of the expected decrease, should oil prices suddenly reverse or the situation in Russia with Ukraine escalate.

  • Lisa Desjardins:

    Yes, help us understand the world markets right now.

    As I said, the president calls this Putin's price increase. How much of the price increase that Americans are experiencing right now is related to Ukraine? How much is still global oil supplies and maybe other factors?

  • Patrick De Haan:

    Well, I think there's just — there is some level of accuracy as referring to the last two months of increases as being associated with Putin, for, without Putin's war on Ukraine, the U.S. probably would not have had to respond with sanctions.

    And so part of this at least could be blamed on Putin's move into Ukraine. Now, having said that, gas prices were already fairly high prior to the war on Ukraine. The national average was already at about $3.30. So, much of the increase since that $3.30 cent national average is likely attributed to the war in Ukraine.

    But, prior to that, a lot of the increase I could blame on COVID, which upended norms between supply and demand. And, of course, oil prices early in the pandemic plummeted, only for the economy to recover, and for then demand to recover much faster than supply.

  • Lisa Desjardins:

    This is a historic release in its amount. Some critics say this is not what the Strategic Reserve is for, that it's for emergencies.

    Do you think that there is enough left in the reserve to deal with any potential other supply shocks that we may not be able to predict?

  • Patrick De Haan:

    Well, I think that's certainly a point of contention and can be debated.

    It is a situation that the U.S. created through sanctions. Though those sanctions have plenty of merit, this is not an emergency that is unexpected. And so I would have to say that part of me agrees that, potentially, this is not an emergency situation, and that we leave the nation more vulnerable to if one of those emergencies does arise where we can't do anything about it.

    And, certainly, the situation that the U.S. has put us into, the administration, is avoidable. Whether or not sanctions were necessary is one thing, but this situation is of the U.S.' choosing.

  • Lisa Desjardins:

    Patrick De Haan, I see that heat map behind you. I take it that's prices. A lot of Americans want to see those colors dim in the near future, but we know you will stay on top of it.

    Thank you for joining us to talk about it.

  • Patrick De Haan:

    Thanks for having me.

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