Biden administration announced the sale of one million barrels of petroleum from a strategic reserve in the Northeast to stabilize prices ahead of the July 4 holiday. While the move aims to alleviate consumer costs, its impact may be limited given the fraction of total petroleum consumption it represents. This decision follows previous actions by President Biden to address energy costs, including releases from the Strategic Petroleum Reserve.
The Biden administration announced on Tuesday that it would sell off one million barrels of gasoline over the coming weeks from a strategic reserve in the Northeast, a move it said was designed to keep gasoline prices in check for consumers ahead of the July 4 holiday.
The sale of the government-owned stock was mandated by Congress in the spending bill it passed in March, and will culminate in the closure of the reserve, which has facilities in the New York Harbor area and Maine. The gasoline will be allocated in quantities of 100,000 barrels, which will be sold through a competitive bidding process, and was “structured to maximize its impact on gasoline prices” by timing it between Memorial Day and Independence Day, the Energy Department’s announcement said.
“The Biden-Harris administration is laser-focused on lowering prices at the pump for American families, especially as drivers hit the road for summer driving season,” Jennifer M. Granholm, the secretary of energy, said in the statement.
In practical terms, the move is unlikely to have a significant impact on gasoline prices, as even one million barrels — or around 42 million gallons — amounts to only a fraction of the total gasoline used in the United States, or even in the Northeast, in a single day.
Last year, the United States consumed around nine million barrels of gasoline a day on average, according to the Energy Information Administration, a division of the Energy Department. The Northeast and Mid-Atlantic regions accounted for roughly 2.5 million barrels, according to an analysis by ClearView Energy Partners, a Washington-based research firm.
President Biden has, unprompted by Congress, fallen back on energy reserves in the past with an eye to bringing down prices at the pump.
Shortly after Russia’s invasion of Ukraine in 2022, the White House released a plan to draw from the Strategic Petroleum Reserve, authorizing the sale of more than 100 million barrels of oil in an effort to stabilize gasoline prices. The Energy Department has been slowly replenishing the reserve this year, though it canceled a planned purchase of three million barrels last month after prices ticked upward.
“This builds on other actions by President Biden to lower gas and energy costs — including historic releases from the Strategic Petroleum Reserve and the largest-ever investment in clean energy,” Karine Jean-Pierre, the White House press secretary, said in a statement.
The gasoline reserve in New England was established in the wake of energy shortages caused by Hurricane Sandy in October 2012. But the limited shelf life of gasoline and other factors have limited the reserve’s practical value.
Demand for gasoline tends to peak in the summer, when people travel more and drive longer distances.
Gasoline prices have been moderating in recent weeks, largely as a result of a recent fall in oil prices, dropping to an average of about $3.60 a gallon on Tuesday from $3.67 a gallon a month earlier, according to data from AAA.
Prices have come down in large part because forecasters believe that global demand for oil will be weaker this year than previously expected. In addition, traders’ fears that the war in Gaza would lead to a big disruption in supply of oil from the Middle East have eased.
Vikas Bajaj contributed reporting from New York and Brad Plumer from Washington.