Page 13 - NorthAmOil Week 07 2023
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NorthAmOil                                       POLICY                                          NorthAmOil











































       Biden administration to sell




       26mn barrels from SPR





        US               THE administration of US President Joe Biden is  January it rejected the first bids. The depart-
                         set to sell 26mn barrels of oil from the country’s  ment said any deal must be a “good deal” for
                         Strategic Petroleum Reserve (SPR), in one of the  taxpayers and that the crude must meet certain
                         releases mandated by US Congress in 2015 to  specifications.
                         bolster the budget.                    A delivery of oil to the SPR is not expected
                           The SPR currently contains about 371mn  until after September 2023, a source told Reuters,   This comes
                         barrels, with volumes having fallen to their low-  In January the House of Representatives
                         est level since 1983.                passed a bill to curb sales from the SPR unless   after the Biden
                           This comes after the Biden administration  more public land was made available for oil and
                         sold 180mn barrels in 2022 in an attempt to ease  gas leasing, save in the case of a “severe” supply   administration
                         record gasoline prices ahead of the mid-term  disruption. The legislation has not passed the
                         elections in November. Gasoline prices had risen  Senate, and the White House has said Biden will   sold 180mn
                         along with the price of crude oil, fuelled by the  veto it.               barrels in 2022
                         disruption following Russia’s invasion of Ukraine   Russia recently said that it would cut oil pro-
                         and the easing of the COVID-19 pandemic.  duction by 500,000 barrels per day (bpd) start-  in an attempt
                           At the time, Republicans criticised Biden for  ing in March, representing further volatility for
                         ‘politicising’ the SPR.              global oil markets. This accounts for about 5%   to ease record
                           The administration has tried to halt the  of the country’s current output. The West has
                         mandated sales more recently. But such a move  imposed oil price caps on Russian crude because   gasoline prices.
                         would have to be approved by Congress, and  of the war in Ukraine.
                         such a measure’s future has become uncertain   Chinese  demand  is  also  accelerating  as
                         with Republican control of the House of Repre-  the country comes out of a strict pandemic
                         sentatives. However, SPR sales of about 140mn  lockdown.
                         barrels were cancelled last year from fiscal years   Oil prices dropped on February 13, the day
                         2024-27.                             the DoE announced the latest SPR sale. Adding
                           The US Department of Energy (DoE) late  to the pressure is the fact that the US may impose
                         in 2022 said it would refill the reserve when  tighter monetary policy, and that OPEC+ has
                         oil prices reached about $70 per barrel, but in  been reducing output.™



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