On November 23, 2021, President Biden announced that the Department of Energy (DOE) will release 50 million barrels of oil from the Strategic Petroleum Reserve (SPR) in an effort to lower prices and address the lack of supply around the world.[1] The decision is a response to the highest oil prices experienced in seven years, which the Biden administration attributed to the pandemic recovery. The announcement is in coordination with other major energy consuming nations, including Japan, China, India, the Republic of Korea, and the United Kingdom. According to the White House press release, the effort “culminates weeks of consultations with countries around the world” and has already affected oil prices, with oil prices dropping nearly 10% since reports of the change became public.

32 million barrels will be an exchange over the next several months, releasing oil that will eventually return to the SPR in the coming years. The exchange is a tool matched to the current economic environment, where markets expect future oil prices to be lower than they are today. The tool helps provide immediate relief and bridge the gap to a period of expected lower oil prices. The exchange also automatically provides for re-stocking of the SPR over time to meet future needs. The DOE said the exchange will be conducted with crude oil from all four SPR storage sites: approximately 10 million barrels from Big Hill, Texas; 10 million barrels from Bryan Mound, Texas; 7 million barrels from West Hackberry, Louisiana.; and 5 million barrels from Bayou Choctaw, Louisiana. The other 18 million barrels will be an acceleration of a sale of oil that Congress had previously authorized.

[1] https://www.whitehouse.gov/briefing-room/statements-releases/2021/11/23/president-biden-announces-release-from-the-strategic-petroleum-reserve-as-part-of-ongoing-efforts-to-lower-prices-and-address-lack-of-supply-around-the-world/