President Biden will use crude oil from the strategic petroleum reserve should the need arise, energy adviser Amos Hochstein has said, noting there was enough oil in the reserve.
"We have been replenishing into the SPR for the last several months. I think we have sufficient supply in the SPR to address any kind of concern in the economy if we need it," Hochstein said, speaking at the Milken Institute Global Conference, as quoted by Reuters.
The U.S. saw the stockpiles of crude oil in the SPR fall from 638 million barrels at President Joe Biden's inauguration to just 347 million barrels by the summer of 2023 as the administration tried to bring down gasoline prices for consumers by releasing over 180 million barrels from the SPR.
Recently, talk has restarted about the possibility of using the SPR to bring down retail fuel prices in case the conflict between Israel and Hamas escalates, leading to higher oil prices and, consequently, higher gasoline and diesel prices for U.S. drivers.
Since rising fuel prices are the last thing a president running for a second term wants to experience in an election year, SPR releases were seen by many as the most likely course of action. This, in turn, prompted questions about whether there is enough oil in the SPR since the federal government's replenishment efforts have been quite sporadic due to prices. Several offers for the purchase of 3 million barrels have been canceled already because prices got too high for the Department of Energy, which had set itself a ceiling of $79 per barrel.
As of January, the DoE had bought back some 32.3 million barrels out of the more than 180 million barrels that were released in 2022. In addition to those volumes, the Department of Energy is getting back some 4 million barrels that were lent to energy companies. The volume in the SPR as of January was about 364 million barrels.
By Irina Slav for Oilprice.com
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More
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Comments
Moreover, it will deepen the United States’ geopolitical crisis at a time of escalating tension with both China and Russia since it will never be able to refill the SPR.
The only possible way is to transfer oil from its oil inventories to help refill the SPR but in so doing it will only replace a geopolitical crisis with a far bigger economic one.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert