The U.S. hopes additional countries will also release oil from their own petroleum reserves, possibly resulting in a further decrease in gas prices.
ATLANTA — Will gas prices at the pumps drop now that the U.S. decided to release one million gallons of oil a day, for six months, from its petroleum reserves?
The consensus is that the extra oil going into the global marketplace may not be a big help, long term; but, short term, gas prices should fall, some, and soon.
In fact, as soon as the U.S. announced on Thursday that it’s about to increase global supplies of crude by a total of 180 million gallons, instantly crude oil prices dropped about five percent.
And that set in motion a potential drop in retail gas prices.
“We will see them come down, in about a week to ten days, by about 25 to 30 cents” a gallon, said Ramanan Krishnamoorti, an oil industry analyst with the University of Houston. “Any small changes in supply or demand cause massive swings in crude prices, and that starts to reflect in our retail gasoline prices.”
It may not be a big enough drop, he said, to make up for how far prices have gone up since Russia’s war against Ukraine.
But Dr. Krishnamoorti said that the releases of the U.S. oil reserves could prevent gas prices from spiking again in the next several months.
“This news is substantial,” he said. “It’s about one percent of the global demand” of about 100 million gallons a day.
As it is, he said, there’s nothing much else the federal government can do to control gasoline prices.
“We’ve used our last resort option, but it is going to be welcome relief for most of us,” he said.
Looking at it another way, an extra one-million barrels of oil a day into the global marketplace amounts to about 20% of what Russia was exporting before the war, said oil industry analyst Robert Kaufmann of Boston University.
“So, by, in effect, replacing Russian oil with very reliable U.S. oil, that will alleviate worries in the market and bring the price of crude oil down, which should, fairly quickly, translate into lower gasoline prices,” Dr. Kaufmann said.
The U.S. hopes that other countries will follow, and release oil from their reserves, too, to increase supply and maybe drive down retail gas prices a bit more.