Page 13 - NorthAmOil Week 07 2023

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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