Some environmentalists criticized the reserve release. “Putting more oil on the market is not the solution to our problem but the perpetuation of our problem,” said Mark Brownstein, a senior vice president at the Environmental Defense Fund.
But Meghan L. O’Sullivan, director of the Geopolitics of Energy Project at Harvard’s Kennedy School, said releasing reserves to ease shortages would not imperil the transition to clean energy. “What the last month has told us is that if there is no energy security today, the appetite for taking hard steps on the path of transition will evaporate,” she said.
The release is not without risk. Goldman Sachs analysts wrote in a research note that a large discharge could cause “congestion” on the Gulf Coast, keeping new oil production from fields in West Texas out of pipelines and storage tanks.
Mr. Biden’s move could also discourage Saudi Arabia and other producers from increasing supply to reduce prices. OPEC Plus, a group led by Saudi Arabia that includes Russia, on Thursday decided to maintain a policy of only modestly increasing supply.
Bob McNally, who was an energy adviser to President George W. Bush, said the release was “not big enough to offset the potential loss of Russian oil exports should the conflict and sanctions pressure continue to extend.”
The oil market tends to go in cycles, so the release may allow the government to sell high and, later, buy low, potentially earning billions of dollars for the Treasury. The government will use the money it makes from oil sales to refill the reserve, which in turn could help raise prices again.
While pushing up those prices, Jason Bordoff, founding director of Columbia University’s Center on Global Energy Policy and a former aide to President Barack Obama, said an eventual refill could also “send a signal to shale producers that may help encourage them to invest in more production, which may help with today’s potential shortages.”
The U.S. reserve contains nearly 600 million barrels, approximately a month of total American consumption, and it can release up to 4.4 million barrels a day. The stockpile was established after the 1973 energy crisis, when Saudi Arabia and other Arab producers proclaimed an oil embargo.