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Economic expert shares impact of Tennessee gas prices amid oil release

Next month President Biden’s plan to release a million barrels of oil a day will begin.
A University of Tennessee economics expert explained the impact President Biden’s plan to release a million barrels of oil a day would have on Tennessee.
Published: Apr. 2, 2022 at 8:47 AM EDT
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KNOXVILLE, Tenn. (WVLT) -A University of Tennessee economics expert explained the impact President Biden’s plan to release a million barrels of oil a day would have on Tennessee.

Scott Holladay, an economics professor at UT’s Haslam College of Business, said he recently made a trip to D.C, talking to legislators about oil and gas prices.

Following Biden’s announcement, he said the plan should somewhat stabilize Tennessee’s current gas prices.

“Releasing oil from the strategic reserve might help keep prices from rising much further, but it’s not likely to make a material difference. Prices aren’t gonna go down, releasing a million barrels a day even with that huge amount of oil coming down the strategic reserve. Relative to the global oil market, it’s a drop in the bucket,” shared Holladay.

Holladay said that for the past twenty years (excluding the pandemic), gas prices have consistently increased during the summer months because people are traveling out on the road more.

He said that when it comes to a solution to lowering gas prices, there isn’t much that can make that happen aside from a resolution with Russia and Ukraine.

“Russia is a major oil exporter. They produce about 10-11 million barrels a day of oil,” said Holladay. “Oil is a global market, and gas is a global market; even if the U.S releases a million barrels a day, the global oil market is huge, and that’s just not going to move the needle. There are not a lot of policy leavers with the administration or legislature to pull in the current environment the gas prices are high, and there’s not a lot of options to reduce it.”

Next month President Biden’s plan to release a million barrels of oil a day will begin.

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