Strategic Petroleum Reserve (SPR) releases in response to Russia’s invasion of Ukraine prevented a further gas price increase of up to 40 cents per gallon, according to estimates released by Treasury Department officials on a call with reporters Tuesday.
The releases, which began in March as the Russian invasion disrupted international energy markets, have been the largest in U.S. history. Although gas prices had already begun climbing due to increased demand compared to 2020, the Treasury Department estimates the SPR releases prevented a further spike of 20 to 40 cents on average, officials said.
“Even with gas prices falling, the president knows they’re still too high,” Aviva Aron-Dine, deputy director of the White House National Economic Council, said on the call. “That’s why the administration continues to work towards a price cap for Russian oil that will keep supply on the market while driving Putin’s revenue down, and continues engaging with industry to expand refining capacity.”
Catherine Wolfram, the Treasury’s deputy assistant secretary for climate and energy economics, said the 20-to-40-cent estimate was based on two separate calculation approaches, the details of which are set to be outlined in a forthcoming blog post.
The calculations are “trying to estimate something that didn’t happen, which is what the gasoline market would have looked like without the SPR releases,” she said. “We need to make assumptions on … how responsive the market is to new volume coming on the market.”
The broad range, she added, reflects the fact that “there are a range of estimates of market responsiveness that are included in the literature.”
The Biden administration has frequently cited the Russian invasion as a major contributing factor to gas price hikes this year, which have reached record highs in recent months but recently begun easing downward.
After entering office with a frosty relationship with Saudi Crown Prince Mohammed bin Salman, the president visited Saudi Arabia earlier in July to appeal to the crown prince to increase the kingdom’s oil production.