Speed Reads

awaiting relief

Will Biden's oil reserves plan actually save you cash at the pump?

It's already been said that President Biden's decision to tap the Strategic Petroleum Reserve (moving in tandem with China, India, Japan, the Republic of Korea, and the U.K.) may not do much by way of lowering gas prices. But why exactly is that? And if there is an impact, when can consumers expect to see it?

It "could still take weeks" for the barrels involved in Tuesday's annoucement to hit the market — "mid to late December, depending on market take up," said a senior administration official, per CNN — which means there's "little hope for immediate relief," Bloomberg writes.

Another issue — the possibility of tapping into reserves has been on the table for so long that many traders say it's already been "baked into oil prices," Bloomberg notes, offering up an explanation for why oil prices rose following Biden's announcement. There's also the issue of angry OPEC officials, who could respond to the news by "canceling plans to boost their own production, negating the addition of stockpiled oil onto the market."

Furthermore, it's unclear at this time what kind of crude will be released. If it's "not the kind of crude refiners are looking for, it could end up being stored in oil tanks or exported, meaning it won't probably have the broader, immediate effect of reducing oil prices at home," explains Bloomberg

Though the president and his team were aware of the move's potentially-limited scope, they thought it the best of their limited options, especially when handled in parallel with other countries, CNN reports. That said, climate activists are worried Biden's "push to lower energy prices is undercutting his lofty goals on climate," per The Washington Post (though the president briefly addressed this concern in his Tuesday remarks).

Said Jean Su of the Center for Biological Diversity: "There is a huge contradiction right now in their actions."