Gas prices are sky-high, oil refineries are running at capacity, and President Joe Biden has been pleading with refiners and gas stations to do more to bring down prices. The Administration has also attempted to do more than talk: in June, five million barrels of oil from the U.S. Strategic Petroleum Reserve (SPR) were sent overseas to Asia and Europe; however, opinions appear to be mixed regarding the effectiveness and actual results of these releases.
While the Administration and others say that increasing the supply of oil through SPR releases has helped bring down prices, Reuters, which first reported the June shipments, seems to suggest that the releases have undermined other White House price-reducing efforts.
According to the Reuters report, Phillips 66
Similar shipments of U.S. oil were made in April as a part of the Administration's efforts to undermine Russian energy. Oil exports from the U.S. have been up across the board since soon after the invasion of Ukraine began in February.
In the second quarter of this year, oil exports from the U.S. Gulf Coast hit a record high, and Biden has been maintaining a record-high pace of releasing roughly one million barrels per day from the SPR. As a result of Biden's efforts, the SPR is at its lowest point since 1986.
"The SPR remains a critical energy security tool to address global crude oil supply disruptions," said a spokesman from the Department of Energy.
Usually, a drop in oil prices leads to a drop in gas prices, but there currently aren't any refineries in the U.S. with the capacity to increase their production.
During the pandemic, demand for gas plummeted, and refinery shutdowns followed, contributing to a drop in refinery investment. Now, the refinery industry is seeing a boom in demand, but it no longer has the ability to keep up. In the Gulf, for instance, refineries are running at 97.9% capacity, the highest level seen in nearly four years.
Gas prices peaked in early June at $5 per gallon but have since been declining. Despite that dip, prices are still above $5 per gallon for one-fifth of the U.S., according to Reuters.
"Crude and fuel prices would likely be higher if [the SPR releases] hadn't happened, but at the same time, it isn't really having the effect that was assumed," an analyst at Kpler oil told Reuters.
While gas prices haven't fallen by much recently, oil prices have dropped.
