Biden Administration To Purchase More Oil For SPR
The Department of Energy’s Office of Petroleum Reserves has announced a solicitation for the purchase of up to 3 million barrels of crude oil for the nation’s Strategic Petroleum Reserves (SPR), the agency said in a Wednesday press release.
The solicitation is for as many as 3 million barrels of crude for delivery into the SPR in April 2024, and will go towards replenishing the nearly 300 million barrels of crude oil sold off during the current administration, ostensibly to lower retail gasoline prices for U.S. drivers.
After selling hundreds of millions of barrels of crude oil when prices were high, the Administration laid out a plan to replenish the nation’s oil stockpiles whenever crude oil prices fell below $79 per barrel. Brent is currently trading under $78 per barrel, with WTI trading below $72.
“Today’s announcement avances the President’s commitment to safeguard and replenish this critical energy security asset. This follows his historic release from the SPR to address the significant global supply disruption caused by Putin’s war on Ukraine and help keep the domestic market well supplied, ultimately helping to bring down prices for American consumers and businesses. Analysis from the Department of the Treasury indicates that SPR releases last year, along with coordinated releases from international partners, reduced gasoline prices by as much as 40 cents per gallon,” the press release said in part.
Bids for the solicitation will be due on January 10, 2024.
Today’s announcement is just the latest in a string of small purchases intended to replenish the SPR—so far, about 14 million barrels in total. The DOE must be careful to initiate its buybacks slowly enough so as to not cause oil prices to spike.
By Julianne Geiger for Oilprice.com
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