Reduced oil supplies, resulting from the war in Ukraine, are raising oil and gas prices.
In response, on March 31, President Joe Biden announced the largest release of oil reserves in U.S. history: An average 1 million additional barrels per day will enter the market for the next 6 months.
This record release is intended to bridge the supply shortfall until the end of the year when domestic production is expected to increase.
To help spur domestic production, the Biden administration is urging companies to produce more oil: Companies producing from their leased acres and existing wells will not face higher fees.
However, companies that continue to sit on nonproducing acres must choose whether to start producing or pay a fee for each idled well and unused acre.
The U.S. Department of Energy will use the revenue generated by the release of oil reserves to restock the Strategic Petroleum Reserve for future years.