The Biden administration has changed its stance on refilling the Strategic Petroleum Reserve (SPR) after significantly depleting it earlier in its attempt to control oil prices.
During an interview with Bloomberg, energy security advisor Amos Hochstein said that the White House will consider replenishing the SPR once oil prices are “consistently” at the level of $70 per barrel. He did not say how long prices will have to remain at that level before the government initiates its repurchasing plan.
In an earlier interview with CNBC this month, Hochstein had said that restocking the SPR will begin when prices “start reaching toward” $70 per barrel and admitted that the administration would also consider buying WTI crude in the price range of $72–73 per barrel.
In mid-October, the White House said that it intends to refill the SPR once oil prices trade between $67 and $72 per barrel.
In the CNBC interview, Hochstein insisted that releasing oil from the SPR was critical in bringing down prices this year, but admitted that oil prices continue to be “a bit higher” than they should be.
On Mar. 31, President Joe Biden announced that he was authorizing the sale of up to 180 million barrels of crude oil from the reserve to address supply issues facing the market at the time.
On the day of the announcement, Brent oil futures were trading at around $108 per barrel. Prices were hovering around $86 per barrel as of 08:37 EDT on Nov. 30. Oil prices were already on a declining trend even before the announcement was made, peaking at roughly $138 per barrel in early March.
Out of the 180 million barrels released, around 15 million are still pending. On Nov. 3, the U.S. Department of Energy (DOE) announced that contracts have been awarded to companies seeking to buy the remaining SPR oil. Deliveries will begin on Dec. 1.
The release of 180 million barrels of oil from the SPR, accounting for almost 40 percent of the stockpile, pushed the reserves to their lowest level since 1984. Biden’s SPR release is more than all American presidents in history combined.
In November, SPR stocks fell below 400 million barrels, which analysts believe will limit the potential for any similar release in 2023.
In a tweet on Nov. 30, Biden claimed that the SPR release helped gas prices drop below where they were before the Russian invasion of Ukraine in late February. “We’re blunting Putin’s price hike,” he said.
However, since Biden took office on Jan. 20, 2021, retail gas prices in America have risen from $2.464 per gallon to $3.649, as of Nov. 28, a jump of 48 percent.
Last week, gas prices fell by $0.12, which is the steepest weekly fall since early August. The cost of oil moved lower due to fears of economic slowdowns.
In an interview with Breitbart late last month, Rep. Randy Weber (R-Tex.) warned that the administration’s drawdown of the SPR means that the United States might find itself in a tough situation should an emergency need for oil develop.
He criticized the Biden administration for “recklessly gutting” America’s oil reserves for “political gain.”
Copyright The Epoch Times – Reprinted with permission