White House Begins On Planning To Refill US Emergency Oil Reserves
The Biden administration is beginning with a 3 million barrel purchase of crude oil and is making good on a scheme to replenish the nation’s emergency oil reserves The US Strategic Petroleum Reserve tame high gasoline prices amid Russia’s invasion of Ukraine and other supply issues.
The purchase of barrels on February delivery follows a historic 180 million barrel release from the US Strategic Petroleum Reserve. The Department of Energy said in a notice Friday announcing the plan “This repurchase is a chance to secure a good deal for American taxpayers by repurchasing IT at a lower price than the $96 per barrel average price it was sold for, as well as to strengthen energy security,”
The announcement says it saw President Joe Biden make outstanding use of the SPR to help curb soaring domestic costs of fuel. The price of oil came down in recent months and now it’s almost 40% off the highs seen in the quick aftermath of the Russian invasion. Still, the administration has repeatedly said that it reserves the right to do more sales if it is a must-need.
White House Begins Plan to Refill US Emergency Oil Reserves
According to a published post by Yahoo Finance, oil futures of the US benchmark initially pared some losings on the news before eventually settling down 2.4% at $74.29 a barrel. The administration of Biden previously laid out a plan to repurchase oil for the roughly about 700 million barrel-strong reserve when the price of crude hit around $70 a barrel.
The SPR is the world’s largest emergency supply that was built in 1975 in the wake of the Arab oil embargo. The DOE is planning an approximately 2 million barrel crude oil trade to meet emergency supply needs to be caused by the shutdown of TC Energy Corp.’s Keystone pipeline, a senior administration official said Friday.
According to the agency’s website, In exchange, an entity often a refiner borrows from the SPR for a short period due to drastic circumstances and later replaces it in full, along with a premium of an additional amount of oil.