President Biden taps federal oil reserves in effort to ease gas prices

Questions remain however about how much far this will go towards actually driving prices downward
Published: Nov. 24, 2021 at 5:39 PM MST
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TWIN FALLS, Idaho (KMVT/KSVT) — During a press conference, President Biden explained his frustration with rising gas prices, citing a 10 percent decrease in oil production costs. The President said those lower prices should have reached the pockets of Americans.

“Instead, companies are pocketing the difference as profit,” President Biden said. “That’s unacceptable.”

In response, the Biden administration announced they are tapping into the federal oil reserves, releasing 50 million barrels of crude oil.

Other countries; India, Korea, Japan and the United Kingdom, agreed to release oil reserves into the market as well.

“While our combined action will not solve the problem of high gas prices overnight, it will make a difference,” said Biden. “It will take time, but before long you should see the price of gas drop where you fill up your tank.”

But is this a move that will impact gas prices over the long term, or a political strategy to end a less-than-stellar year on a positive note?

“Certainly, the appearance of doing something is helpful from a political standpoint,” said Matthew Conde of AAA Idaho.

According to Conde, this move will alleviate some of the pain at the pump in the coming weeks, but consistent relief might not be felt until demand decreases.

“The bigger piece of the equation will probably be falling demand. You’ll see the colder months, you’ll see fewer reasons to travel after the holidays are over,” Conde said. “It’s really hard yet to know for sure how this is going to affect everything.”

Conde says there is hope that this united effort will cause the countries in OPEC to make moves to increase production, the most effective way to lower prices at the pump.

“This gesture is it something that becomes the first domino that gets other countries involved,” Conde said, “then perhaps OPEC says, ‘well now we’re going to join the party to rather than be the only ones that aren’t involved,’ or does it just become a staring contest.”

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