As President Biden continues depleting the Strategic Petroleum Reserve, the administration is reportedly considering replenishing its supply once prices drop below $80 per barrel.
In March, the president ordered the release of 180 million barrels to address supply shortages and skyrocketing gas prices in the U.S., though it had a minimal impact. Now, officials are “looking to protect US oil-production growth and prevent crude prices from plummeting,” Bloomberg reports, according to sources.
It was only two years earlier that Democrats blocked former President Trump from filling the reserve when oil was hovering around $24 per barrel.
Trump in March of 2020 was looking to stabilize the oil industry after Covid-19 hit in 2020 and crushed global petroleum demand. With oil at the time priced at about $24 a barrel, Republicans proposed spending $3 billion to fill up the reserve. But the idea became a political football in larger negotiations on trillions in coronavirus relief, with Senate Democratic Leader Chuck Schumer proclaiming that his party had blocked a “bailout for big oil.”
That decision effectively cost the US billions in potential profits and meant Biden had tens of millions of fewer barrels at his disposal with which to counter price surges. (Bloomberg)
The reserve, which has a capacity of 727 million barrels, is reaching “crisis levels." After a recent drawdown, it stands at 442 million barrels, the lowest point it's been since 1984.
Not a meme stock or a collapsing currency, this is America's Strategic Petroleum Reserve, and this is before today's record release of 8.4mb, the largest ever. pic.twitter.com/yodSXxdjoO
— James Lavish (@jameslavish) September 12, 2022
The administration pushed back on Bloomberg's reporting about refilling the reserve, however.
“Claims that we are currently considering buying oil once it dips below $80 a barrel are inaccurate," said Energy Department spokeswoman Charisma Troiano.
“The Department of Energy proposed an approach months ago to replenish the Strategic Petroleum Reserve, and that approach does not include any such trigger proposal. As we said then, we anticipate that replenishment would not occur until well into the future, likely after fiscal year 2023,” the spokeswoman added.
Join the conversation as a VIP Member