The Biden administration has announced that it is selling 26 million barrels of crude oil from the Strategic Petroleum Reserve (SPR).
Legislation from 2015, enacted during the Obama administration, established SPR sales from 2018 until 2025 to assist with federal spending. To avoid selling off the 26 million barrels, Congress would have needed to change the act.
Last year, the Biden administration sold a record 180 million barrels. Although the legislation required 140 million more barrels to be sold between 2024 and 2027, a proposal from the Department of Energy (DOE) prompted Congress to cancel the sales.
The SPR currently sits at 371.6 million barrels, the lowest it has been since December 1983, according to reports from the U.S. Energy Information Administration. After selling 26 million more barrels, the SPR will be at roughly 345.6 million barrels, its lowest since August 1983.
“This action will not only maintain volume but also ensure the best value for taxpayers at approximately $74 a barrel that avoids unnecessary releases to the market when there is not a supply disruption,” said the DOE in a statement, as reported by Yahoo Finance.
Amid concerns about a depleted SPR, the Biden administration is developing a plan to resupply the reserve. The administration proposes to refill the SPR with the revenue from legislative solutions, emergency sales, and returns of oil from previous exchanges that would amount to over 25 million barrels.
“This repurchase is an opportunity to secure a good deal for American taxpayers by repurchasing oil at a lower price than the $96 per barrel average price it was sold for, as well as to strengthen energy security,” said the department, as reported by Yahoo Finance.
Last month, the DOE rejected bids from oil companies to sell back roughly 3 million barrels of oil.
“DOE will only select bids that meet the required crude specifications and that are at a price that is a good deal for taxpayers,” it said, as reported by EnergyNow. “Following review of the initial submission, DOE will not be making any award selections for the February delivery window.”
I watch Natural Gas and Oil and Energy closely, every day. An observant person can tell that Biden will let the refill of the SPR fall on another administration. Biden is a debt now guy.