WASHINGTON D.C. — In an effort to counter an expected sharp rise in oil prices amid Russian President Vladimir Putin’s illegal invasion of Ukraine, Sen. Patrick Leahy (D-Vt.) has joined Sen. Jack Reed (D-R.I.), Rep. Ro Khanna (D-Calif.) and others in a bicameral letter to President Joe Biden urging the White House to help stabilize gas prices and help working families by releasing oil from the Strategic Petroleum Reserve (SPR).
Drawing down oil from the federal government’s stockpile now and then replacing it later with less expensive crude could help temporarily keep gas prices down for Americans and strengthen U.S. national security, while also being a good deal for taxpayers, the group said in a press release.
“As Russia’s invasion of Ukraine continues to cause volatility in the global oil market, we are writing to urge you to consider using all of the tools at your disposal to insulate Americans from rising gasoline prices. This includes an additional release from the Strategic Petroleum Reserve, the use of diplomatic pressure to encourage global oil producers to ramp up their output, and restrictions on petroleum exports unless they will advance our national security goals and lower prices for consumers,” Leahy and nine other members of Congress wrote.
The Strategic Petroleum Reserve is an emergency stockpile of petroleum maintained by the U.S. Department of Energy (DOE). It is the largest known emergency supply of oil in the world, and its underground salt domes in Louisiana and Texas has an authorized capacity for approximately 714 million barrels.
According to DOE, the average price paid for oil in the Strategic Petroleum Reserve is $29.70 per barrel. Since the invasion, oil prices have topped $100 per barrel for the first time since 2014.
In Vermont, gasoline prices have risen 22 cents in the past month and are now more than a dollar above where they were a year ago, according to the release.
In November, President Biden ordered the release of 50 million barrels of oil from the Strategic Petroleum Reserve to deal with surging gasoline prices in the United States, which appeared to put a temporary damper on them.
Crude oil prices represent the biggest factor in terms of the prices that consumers pay at the gas pump. But the cost of refining, distribution expenses, taxes, and rent for the gas station also influence the price at the pump.
“Families are having to choose between filling up their cars and putting food on their kitchen tables. In our home states, high gasoline prices are hurting families and small businesses still trying to dig themselves out of the economic fallout of the pandemic. Meanwhile, the major oil companies are pocketing their highest profits in years, and they are using those profits to issue higher dividends and buy back stock,” the groups said in the letter to the president. “We support your pledge to “closely [monitor] energy supplies for any disruption” and echo your words of caution that “American oil and gas companies should not exploit this moment to hike their prices to raise profits.”
The letter added, “We believe the current moment calls for the Administration to use all its options to help insulate American households from price spikes being exacerbated by events far from home.”