The US Energy Department announced on Friday a plan to replenish the Strategic Petroleum Reserve (SPR). The Biden administration’s historically large release.
The policy represents a significant shift after President Biden authorised the largest-ever release. Earlier this year in response to Russia’s invasion of Ukraine, which caused oil prices to skyrocket to $120 per barrel.
The plan represents “an opportunity to secure a good deal for American taxpayers. By repurchasing oil at a lower price than the $96 per barrel average price at which it was sold, as well as to strengthen energy security,” according to a news release from the Department of Energy (DOE).
The agency announced that it will purchase up to three million barrels of oil as part of a pilot programme to attract sellers who can lock in prices.
The SPR currently holds 382 million barrels of crude, a decrease of 216 million barrels from its pre-September 2021 level.
In October, a Biden administration official stated that the administration intended to purchase oil to replenish the reserve as soon as prices reached $67-72 per barrel.
Crude prices have dropped significantly since their peak earlier this year. The US benchmark West Texas Intermediate fell 2.4 percent to $74.29 per barrel on Friday.
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According to the DOE announcement, gasoline prices have dropped by more than $1.80 per gallon since their peak in June 2022 and are now the lowest they have ever been. since September 2021.
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