- In March, the US government allowed the release of 1 million barrels per day of strategic reserve oil over a six-month period.
- Earlier this week, there were rumors that the US administration might start refilling the Strategic Petroleum Reserve when oil prices fell below $80.
- The US Department of Energy has dismissed the rumors, confirming that there is no set price and the Strategic Petroleum Reserve will not be refilled anytime soon.
The US Department of Energy says that the US administration will not rush to buy crude oil to refill the Strategic Petroleum Reserve (SPR), and the purchase plans do not contain any oil price below which the administration will start buying crude.
In March, the Biden administration authorized the release of 1 million barrels per day of strategic petroleum reserves over six months in an effort to lower oil prices and possibly boost domestic production through contracts with companies to buy oil in the future at fixed prices. . The SPR releases are a response to the global oil market turmoil caused by the Russian invasion of Ukraine and subsequent Western sanctions that drove up oil and gas prices. The final plan called for the total release of 180 million barrels of crude oil from the Strategic Petroleum Reserve to counter the inevitable increase in oil prices amid market tightness.
Earlier this week, Bloomberg News mentioned That the administration could start filling the Strategic Petroleum Reserve when oil prices fell below $80 a barrel. The timing is being considered as the Biden administration looks to keep US oil production growing and prevent a drop in oil prices, sources familiar with the matter told Bloomberg.
Following this report, Energy Department spokeswoman Karisma Troiano said in the statement cited by Bloomberg:
“Allegations that we are currently considering buying oil once it drops below $80 a barrel are inaccurate.”
The Department of Energy proposed an approach months ago to replenish the Strategic Petroleum Reserve, and this approach does not include any such stimulating proposal. As we said at the time, we expect the renewal to occur only in the near future, most likely after fiscal year 2023, the spokeswoman added.
Early Thursday, US benchmark West Texas Intermediate crude was trading at around $87 a barrel. The price fell last week to $81 a barrel – the lowest level since January, as concerns about oil demand in slowing economies took center stage in the market.
By Tsvetana Paraskova for Oilprice.com
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