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What is the strategic oil reserve, and can it lower gas prices?

An oil pump in Culver City, Calif. Biden is releasing about 180 million barrels of oil from the Strategic Petroleum Reserve to try to temper high gas prices. (Kyle Grillot/Bloomberg)
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On Thursday, President Biden announced a huge release of oil from the Strategic Petroleum Reserve. The goal is to temper gas prices, which are at a 14-year high, driven in part by Russia’s invasion of Ukraine and the U.S. ban on Russian oil as a response.

But some analysts say the real benefit of these oil reserves isn’t only monetary — it’s also psychological. Americans can feel like their government is doing something to drive down energy costs during a war, and Biden gets to appear as if he’s taking concrete action to help Americans afford gas.

Here’s what the oil reserves are, how they can change gas prices and the political debate over them.

What are strategic oil reserves and how much oil reserves does the U.S. have?

The reserves are what they sound like: Hundreds of millions of barrels of oil tucked away — most of them in salt caverns in Texas and Louisiana — for when there’s a crisis that raises oil prices. We have roughly 568 million barrels in the reserve right now, report The Post’s Tyler Pager and Jeff Stein.

The idea came about in the 1970s after an energy crisis. The U.S. at the time depended on the Middle East to deliver an influx of oil, and some foreign leaders tried to demand U.S. support for regional conflicts in exchange. The U.S. didn’t want to be beholden to other nations in times of crisis, so it started the Strategic Petroleum Reserve.

When have they been used?

The idea is to only tap the reserves in a true crisis — a natural disaster or a war — not every time prices go up. “They are an insurance policy,” said Meg Jacobs, an energy expert and author of “Panic at the Pump.” The U.S. has dipped into its oil reserves various times during recent history, like during the Gulf War, or after Hurricane Katrina, when George W. Bush released 11 million barrels of oil.

What is Biden proposing?

The president proposes releasing 1 million barrels a day, for the next six months.

That means about 180 million barrels of oil will enter the economy that weren’t there before. It’s a truly historic amount — about a third of the strategic reserve.

For comparison, in November, Biden released 50 million barrels of oil to try to lower gas prices.

How do oil reserves affect gas prices?

This is debatable. On paper, the idea is that more oil on the market will mean lower prices. But the U.S. uses about 20 million barrels of oil a day, and Biden is temporarily injecting 1 million more barrels a day. “It’s hard to have any kind of release make a serious dent because our consumption is so high,” Jacobs said.

Still, when combined with other tools, strategic oil reserves can lower gas prices, said Jay Hakes, an energy expert and author of two books about the oil reserve, including “Energy Crisis: Nixon, Ford, Carter and hard choices in the 1970s.”

The government can encourage people to use less oil as a way to stick it to Russia, and that can help blunt prices, Hakes said. Biden is also encouraging other countries with strategic oil reserves to release barrels on the global market.

And the U.S. can encourage companies to ramp up oil production back home. That’s what Biden tried to do Thursday. “Too many companies aren’t doing their part and are choosing to make extraordinary profits and without making additional investment to help with supply,” read a White House announcement on the release of the oil. Biden asked Congress to make oil companies pay a fee if they’re sitting on permits to drill on federal land and not actively drilling oil from existing wells there.

But the main benefit is psychological, especially during a war that has united Americans against Russia. “The fact people know the reserves are there is a strength for the country,” Hakes said.

Jacobs said to think of these oil reserves as a weapon against Russia: “The strategic reserve is part of our arsenal, designed precisely for these kinds of situations.”

What are the downsides of using the oil reserve?

The first is that there is less oil to pull from in a future crisis. Building the reserves back up requires the government to purchase more oil, and that may take years.

The second is the impact on the climate. Environmentalists want the U.S. to drill and consume less oil, not more. Biden tried to counter that criticism by saying he would also invoke a law known as the Defense Production Act to have American companies produce materials for batteries used in electric vehicles. (Driving is the No. 1 reason Americans consume so much oil.)

The third downside is for Biden specifically. This might not significantly change oil prices in the short run, and won’t change them in the long run. It’s also hard to know how high prices would be, without the additional oil — so if Americans still suffer from relatively high prices, they might not notice if the reserves are easing the hit to their wallets.

But Biden doesn’t have many other tools at his disposal to shift oil prices. Though he could emphasize conservation — Americans taking individual actions to use less oil in their daily lives — it was not a popular tactic when Jimmy Carter tried it in the 1970s.

So there’s a risk that Biden makes a big deal about dropping more oil into the economy, it doesn’t work, and then he’s out of other significant actions to take.

What are the politics of the oil reserves?

High gas prices are bad news, politically speaking, for a sitting president and his party. Biden’s poll numbers have reflected that: Even as unemployment goes down, Americans still feel pessimistic about the economy — and largely blame him for it — in part because of high gas and food prices.

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