Title: Biden Administration Delays Replenishing Emergency Oil Reserves as Crude Oil Prices Surge
Washington: In light of the surging crude oil prices, surpassing $80 a barrel, the Joe Biden administration has made the decision to postpone plans to replenish the country’s emergency oil reserves. The Department of Energy (DOE) recently canceled a purchase of 6 million barrels for its strategic reserve, stating the intention to strike a favorable deal for taxpayers.
While the government remains committed to replenishing the reserves, Biden’s administration used a significant portion of the emergency reserves last year to counter rising gasoline prices caused by OPEC production cuts and the import ban on Russian oil due to the conflict in Ukraine.
Bridget Bartol, the Deputy Chief of Staff at the Department of Energy, affirmed the DOE’s commitment to pursuing a replenishment strategy for the Strategic Petroleum Reserve (SPR). Bartol stated that direct purchases will resume once a satisfactory deal is secured for taxpayers. Additionally, the authorities plan to selectively return reserves and cancel scheduled oil sales in coordination with Congress when deemed unnecessary.
Beginning in March 2022, Biden initiated the withdrawal of 180 million barrels from the strategic reserve, resulting in its lowest level since the 1980s. The utilization of the reserve aimed to curb escalating gasoline prices following Russia’s invasion of Ukraine. The tapping into reserves is one of the few actions a president can independently take to address inflation, which can impact the party in power during an election year.
Earlier this year, the Energy Department kicked off the replenishment process by purchasing 6.3 million barrels of oil and cancelling congressionally mandated sales of 140 million barrels over the next three years. Congress approved the sales’ cancellation through a spending initiative in December.
While the purchase price of the oil was not disclosed, West Texas Intermediate crude was priced around $74 per barrel at the time the transaction received approval. On Wednesday, it rose to $81.85 per barrel due to weaker global supply.
Simultaneously, gasoline prices surged to a dollar per liter ($3.80 per gallon), compared to 93 cents per liter ($3.53 per gallon) in mid-May, reports auto club AAA. The prices peaked at $1.32 per liter ($5 per gallon) in June 2022.
A spokesperson from the DOE emphasized that the United States possesses adequate reserves to address emergencies, ensuring the availability of deposits stored in vast salt caverns across Louisiana and Texas.
While Energy Secretary Jennifer Granholm remains committed to replenishing the reserves, she indicated to CNN last month that the work might extend beyond Biden’s current presidency, which concludes in January 2025.