Top Senate Democrat asks Biden to tap US oil reserves to lower gas prices as inflation hits 30-year high

Senate Majority Leader Chuck Schumer has urged US President Joe Biden to tap into emergency petroleum reserves to lower rising gasoline prices, which have climbed to their highest levels in seven years.

"We're here today because we need immediate relief at the gas pump and the place to look is the Strategic Petroleum Reserve," the Senate’s top Democrat said at a news conference in New York.

"No industry is spared. But fuel gasoline is the worst of all," Schumer said of the ongoing supply chain disruptions in the US. "Let's get the price of gas down right now. And this will do it."

Rising energy costs, including gasoline as well as natural gas and coal, have been a major factor in driving the inflation rate to its highest level since 1990. The national average for a gallon of gas hit $3.42 last week—a price last seen in September 2014.

According to the American Automobile Association (AAA), the average national price is $1.31 more than what it was a year ago and 16 cents more than a month ago. This has put extra strain on US consumers and created a major political headache for the Biden administration.

President Biden has said that tackling the spiraling inflation was a high priority of his administration. But analysts say there is not much he can do to push gasoline prices down as American oil companies answer to shareholders and owners, not to the government.

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US President Joe Biden

The administration has explored another avenue to address the supply crunch in the United States: It has pleaded with members of OPEC to pump more crude. But the exporting countries have rebuffed that request, sticking to their plan of only modest production increases.

US Energy Secretary Jennifer Granholm said last Monday Biden could still act on the US Strategic Petroleum Reserve, the stockpile of crude the US government stores in a series of underground caverns on the coasts of Texas and Louisiana.

“That's one of the tools that he has, and he's certainly looking at that,” Granholm said last week on CNN.

But, thus far, there has been no word from the administration on whether the president is considering authorizing a sale from those reserves.

US gas prices highest this year, expected to keep climbing

The US has hit its highest average for gas prices yet this year, with the average price for just one gallon of gas standing at $3.30 on Wednesday.

Last week, 11 Senate Democrats wrote to Biden, asking the president to tap the oil reserves and ban crude oil exports to lower gas prices.

"Continued US exports and overseas supply collusion could be devastating to many in our states, contributing to higher bills for American families and businesses," the senators said.

The reserves, stored so the United States can cope with any unexpected disruption in supplies, are not meant as a tool to manage prices. But, hypothetically, a sudden considerable release from the reserves would increase supply and drive prices down, at least temporarily.

Analysts have cautioned that a release from the oil reserves would only be a short-term solution, as it would not increase the country’s overall production capacity.

Louise Dickson, a senior oil markets analyst at Rystad Energy, said a one-time release "is not a lasting solution for an imbalance between supply and demand."

Moreover, because the Strategic Petroleum Reserve holds crude oil, not gasoline, tapping into it would not immediately and automatically lower prices at the pump.

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