The United States Oil ETF (NYSE:USO) traded higher by 2.4% on Tuesday after President Joe Biden announced he will be releasing oil from U.S. strategic reserves in an attempt to lower global gasoline prices.

What Happened? The White House said Tuesday the U.S. will release 50 million barrels of crude oil from its Strategic Petroleum Reserve. The decision is part of a coordinated effort with China, Japan and other energy consuming nations to combat a rapid rise in energy prices. U.S. gasoline prices are currently near seven-year highs.

Why It’s Important: The coordinated oil release includes U.S., India, China, Japan, Korea and the United Kingdom and is the first of its kind in history.

“The President stands ready to take additional action, if needed, and is prepared to use his full authorities working in coordination with the rest of the world to maintain adequate supply as we exit the pandemic,” the White House said in a statement.

As of Nov. 19, the U.S. SPR held 604.5 million barrels, according to the Department of Energy. The current release represents about 8.2% of the total U.S. SPR.

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It’s not the first time the U.S. has released oil from its SPR:

• In 1991, President George H.W. Bush released 17 million barrels during the first Gulf War.
• In 2005, President George W. Bush released 11 million barrels following Hurricane Katrina.
• In 2011, President Barack Obama released 30 million barrels to counter production disruptions in Libya.

“On the surface- the WH announcement and details just leave me disappointed- go big or go home, and I think the WH struck out,” GasBuddy analyst Patrick De Haan said on Twitter. “Oil trading slightly higher, make no mistake-if OPEC comes out shortly and has a strong statement, we'll be back to $80 in no time.”

Several oil and gas stocks were among the biggest gainers in the S&P 500 on Tuesday following the announcement:

Benzinga’s Take: Given oil and natural gas prices were both trading significantly higher on Tuesday following news of the SPR release, it seems the market has already priced in the possibility of an even larger release. Bank of America recently projected Brent crude oil prices will average $85 per barrel in 2022, with price spikes as high as $120/bbl.