For the 60th consecutive week, the U.S. Strategic Petroleum Reserve is moving downward—a trend that needs to reverse for energy independence
Key Details
- In an effort to alleviate high gas prices, President Joe Biden has released millions of barrels of oil from the Strategic Petroleum Reserve (SPR).
- While releasing the oil reserves has lowered gas prices, the supply is now reaching its lowest point since 1984.
- If the SPR is not replaced, the U.S. will not have an emergency supply of oil needed to power vehicles and heat homes.
Why it’s news
The Biden administration has said that it plans to replace the millions of barrels distributed when prices reach $72 a barrel. Currently, barrel prices are around $92.
President Biden’s plan to cut gas prices has cost the SPR nearly 33% of its overall supply. Without an emergency supply, the U.S. energy supply is particularly vulnerable.
In order to replace what has already been used, the government will need to purchase around 240 million barrels—and that’s just to reach the 2020 levels of the reserve.
Demand for oil is still high, meaning that oil prices are unlikely to drop much in the near future.
The shortage of oil reserves could incentivize a shift to renewable energy options. EVs that run without oil and homes heated by green energy sources could reduce overall dependence on oil.
However, a quick transition to green energy is not likely to be the best course.
Backing up a bit
Last month, the White House reportedly asked the Organization of the Petroleum Exporting Countries (OPEC) to delay its planned 2 million barrel reduction for one month.
OPEC did not comply with the request, and oil cuts were made on October 5.
The reduction in oil production will likely play into the continued high prices on oil production.
