The Biden administration is delaying plans to restock the USA’s emergency oil reserve amid a price increase that puts oil above $80.00 USD a barrel. The Energy Department canceled a planned purchase of 6 million barrels in order to secure a good deal for taxpayers.
The administration said it is committed to refilling the reserve, which was drained last year in a bid to stop gas prices from rising during production cuts by OPEC. This was also during the initial ban on Russian oil imports due to the war in Ukraine.
Energy Department Deputy Chief of Staff Bridget Bartol commented: “The DOE remains committed to its replenishment strategy for the SPR, including direct purchases when we can secure a good deal for taxpayers.” Officials will use targeted exchange returns and cancellations of planned oil sales where certain drawdowns are unnecessary in compliance with congress.
Biden’s drawdown brought the reserve to an approximate 700 million-barrel capacity (half) as he sought to thaw out high gasoline prices in the aftermath of Russia’s invasion of Ukraine. This was also a direct attempt at controlling inflation. The Energy Department began refilling the reserve earlier this year by purchasing 6.3 million barrels and canceling 140 million barrels in congressionally mandated sales.
West Texas Intermediate crude oil was selling at $74.00 USD per barrel when the transaction was approved for the 140 million barrels by congress. Benchmark West Texas Intermediate crude oil was recently selling at $81.85 per barrel on August 2nd, due to tighter global supplies.
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