COLORADO SPRINGS, Colorado — President Joe Biden announced a major draw-down of the Strategic Petroleum Reserve Thursday by one million barrels per day for a period of six months.
Commodities markets reacted favorably to the news with the West Texas Index of crude oil futures dropping from $107 per barrel to nearly $100 per barrel.
"This is a war time bridge to increase oil supply until production ramps up later this year and it is by far the largest release of our national reserve in our history," Biden said in a nationally-televised address.
Prices for gasoline and crude oil have risen for months, jumping their highest with disruptions caused by the Russian invasion of Ukraine.
Skyler McKinley, Regional Director of Public Affairs for AAA, warned consumers to not set their hopes to high about prices at the pump.
"I would caution drivers and Coloradans against thinking that this is going to send prices plummeting," McKinley said.
He explained that many of the issues driving up oil prices began during the pandemic and are still not resolved.
"Even prior to the Russia issue there just was not enough crude oil as a function of production jumping off a ledge during COVID," McKinley said.
"Production has not come back yet, of course, were also dealing with the fact that the United States is not buying Russian energy exports and many global actors are not buying energy from Russia."
He expects prices for crude oil and gasoline to remain relatively high until domestic production increases. He also doesn't believe that environmental or regulatory policies are hampering production.
"Congress has not acted, the president has not acted for many administrations when it comes to limiting how we produce oil in this country," he said.
McKinley does worry that such a large draw-down of the oil reserves could have unintended consequences if there is a severe hurricane season.
"If we have a bad hurricane season, that could really gum up the works and then we might regret the draw down of so many barrels from our strategic reserves because that's what the reserves are there for," said McKinely.
During his address, the president called on Congress to create fees that would be charged to oil companies who hold leases to drill on federal land but are not using them.
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