Biden to Deplete Another 26 Million Barrels From Strategic Oil Reserve

Monday was Monday when the Biden administration announced another sale from the Dept. Energy’s Strategic Petroleum Reserve (SPR).26 million barrels will be delivered to market between April 1st and June 30th. This will bring the total barrel reserve down to just 339,000 barrels since 1983.

The latest drawdown of 26 million barrels of SPR is not the largest ever announced by Biden as a response to Russia’s invasion of Ukraine. It’s a result of a requirement contained in two laws that Congress passed during the Obama administration: the Bipartisan budget Act of 2015 (FAST Act) and the Bipartisan Budget Act 2015. This announcement comes as the U.S. approaches the summer driving season.

“Biden is front-loading SPR barrels to avoid a summer gasoline price spike,” Phil Flynn is an analyst Price Futures Group contributor to FOX Business Network. “There are growing concerns among the Biden administration that gas prices are headed back to $4.00 a gallon and the president is fearful of the political heat he will have to take.” 

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A well for oil at Fort Berthold Indian Reservation, near New Town (N.D.). (Tyler Olson/Fox Business/Fox News).

Prices are subject to change “By pushing barrels forward from previously announced sales he is robbing Peter to pay Paul but is discouraging future U.S. oil and gas investment. There should be some backlash from Republicans who are getting tired of using the SPR for political purposes and creating short-term price relief in exchange for much higher prices down the road.”

Biden was inaugurated in January 2021 with 638 million barrels of the SPR’s maximum capacity of 713million barrels. After a series of releases totaling more than 260 million barrels, the SPR is at about 371.6 million barrels as of February 2023 — the lowest level since December 1983, according to data from the Energy Information Administration (EIA). Another 26 million barrels were sold from the SPR, without any additional Oil in new barrels The SPR inventory would fall to 346 millions barrels to compensate. This would make it the lowest level since August 1983. 

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On Jan. 28, 2022 in Los Angeles, an oil pumpjack works in the Inglewood Petroleum Field.  (Mario Tama/Getty Images / Getty Images)

Lawmakers from both parties have used SPR sales as a means to finance spending proposals — often through mandates that the sales occur years in the future as was the case for this sale. SPR sales have been regularly used by presidents to provide temporary relief. gas prices.

The significant decline in barrels during the SPR has prompted lawmakers to balk at further reductions. In December, Congress passed the bipartisan Omnibus Spending Bill. This bill canceled the mandated sales of approximately 140 million barrels. These were scheduled for fiscal years 2024-2027. 

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A pump jack fills oil in a field near Calgary (Alberta), Canada, on July 21, 2014. (REUTERS/Todd Korol/File Photo / Reuters Photo).

Recently, the Republican House passed two bills that impose conditions on future SPR sales. These include a ban on importing. SPR oil sold to the Chinese government or the companies it controls, and a proposal that would require the creation of a plan to make federal lands more accessible for them Leasing oil and gas before a non-emergency drawdown on the SPR. The former was passed by a broad bipartisan vote Vote 331-97While the former moved along party-lines, following a 220-205 vote.

The Department. The Department. “The Administration is focused on replenishing the SPR in a way that provides the best deal for taxpayers by aiming to repurchase crude at a lower price than it was sold for, while providing certainty to the industry in a way that helps encourage near-term production.” 

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DOE is looking to replenish the SPR over the long term through direct repurchases with revenues obtained through emergency sales, exchange returns that include a premium to volume delivered, and legislative solutions that avoid unnecessary sales unrelated to supply disruptions – such as through the arrangement included in the recent omnibus.

This report was co-authored by Edward Lawrence and Alexa Annus of Fox Business.