U.S. President Joe Biden declares the discharge of 1 million barrels of oil per day for the following six months from the U.S. Strategic Petroleum Reserve, as a part of administration efforts to lower gasoline prices, during remarks within the Eisenhower Executive Office Constructing’s South Court Auditorium on the White House in Washington, March 31, 2022.
Kevin Lamarque | Reuters
The U.S. Energy Department said on Friday it’s going to begin buying back oil for the Strategic Petroleum Reserve, or SPR, the primary purchase since this yr’s record 180 million barrel release from the stockpile.
The department will buy as much as 3 million barrels for delivery in February, a senior official told reporters.
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President Joe Biden announced the 180 million sale in late March to combat surging gasoline prices that boosted inflation after the February invasion of Ukraine by Russia, the world’s largest exporter of fossil fuels.
The sale shrunk levels within the SPR to about 380 million barrels, their lowest since 1984, raising concerns about energy security.
“We’ll be releasing a solicitation to buy 3 million barrels of oil for delivery in February of next yr, 2023,” the official said.
Contracts can be awarded to energy corporations by Jan. 13.
“This approach will lock in a price upfront when corporations submit their bids,” the official added.
To assist relieve supply shortages at refineries after an oil spill last week shut down the Keystone crude pipeline, the Energy Department may even execute an exchange of about 2 million barrels from the SPR, that corporations can have to send back at a later date.
“We’re capable of try this at the identical time we’re doing the three million barrel buy-back,” the official said.
The White House said in October it will buy back oil for the SPR when prices were at or below about $67-$72 per barrel, a bit below where U.S. benchmark futures were trading on Friday at about $75.
“We’re gonna attempt to be nimble and versatile here,” the official said, adding that the department likes where prices at the moment are for exploring buy-backs.
“It might be very useful to place this notice out now and to see what the market would offer when it comes to interest and at what price level for that,” the official said.
The Energy Department said buying oil back at about current prices is “a possibility to secure a superb deal for American taxpayers by repurchasing oil at a cheaper price than the $96 per barrel average price it was sold for, in addition to to strengthen energy security.”
