On Wednesday, the Biden administration announced that it was stepping back from a plan to refill the Strategic Petroleum Reserve (SPR) following a significant drawdown in recent years.
Bloomberg News reported the decision marks a reversal from last month’s announcement to solicit up to 3 million barrels to a Louisiana site in August and September. It also coincides with crude oil prices reaching their highest level in months as geopolitical tensions increase.
The Energy Department claimed to be “keeping the taxpayer’s interest at the forefront.” The agency said, “We will not award the current solicitations for the Bayou Choctaw SPR site and will solicit available capacity as market conditions allow,” adding, “We will continue to monitor market dynamics.”
Started in 1975, the SPR is “the world’s largest supply of emergency crude oil … established primarily to reduce the impact of disruptions in supplies of petroleum products and to carry out obligations of the United States under the international energy program,” according to the Energy Department.
The SPR plummeted to its lowest level in decades in 2022 after the Biden administration announced a 180-million-barrel drawdown in an attempt to stabilize global oil markets and combat rising gasoline prices.
Recent data showed the SPR at 363.6 million barrels — far below the authorized storage capacity of 714 million barrels — after it topped 600 million barrels as recently as late 2021.
U.S. oil futures rose to $85 per barrel for the first time since October on Tuesday, which MarketWatch attributed to concerns about a direct conflict between Israel and Iran following a strike in Syria that killed a top Iranian commander. Also mentioned in the report were Ukrainian attacks on Russian oil facilities.
The Biden administration has made declarations since late 2022 pledging to work toward repurchasing crude oil for the SPR.
Just last week, the Energy Department said it purchased 2.8 million barrels for a site in Texas despite the cost being $81 dollars a barrel, $2 over the U.S. target price, making for a total of 32.3 million barrels of oil brought for the SPR at an average price of $76.98.
The news on Wednesday that the agency was backing away from the solicitation for 3 million barrels meant for the Louisiana site in Bayou Choctaw drew fresh criticism.
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“It’s pure insanity to watch the Biden Administration cut American oil production and then claim they can’t refill our critical reserve because of the price,” Daniel Turner, founder and executive director for Power The Future, said in a statement, according to Fox Business.
“[President] Joe Biden drained the SPR for political reasons, cut our domestic production for his climate agenda, and now he’s leaving our critical reserve more vulnerable because he’s incompetent,” Turner added. “As a result, Americans are paying more at the pump, more at the grocery store and our SPR is less full during a time of rising turmoil in the Middle East.”