According to Fox Business Network, the Biden administration revealed plans on Monday to sell an additional 26 million barrels of oil from the Strategic Petroleum Reserve in order to avoid fuel price increases.
The sale was required under the Fixing America’s Surface Transportation Act and the Bipartisan Budget Act of 2015, both of which were passed by Congress while the Obama administration was in office.
The barrels are expected to enter the market between April and June, precisely when gasoline costs are expected to rise owing to the summer driving season.
“Biden is front-loading SPR barrels to avert a summer gasoline price surge,” Price Futures Group specialist Phil Flynn said. “There are growing concerns inside the Biden administration that gas prices may return to $4 per gallon, and President Biden is terrified of the political fallout.”
“By accelerating barrels from already announced sales, he is robbing Peter to pay Paul while inhibiting future US oil and gas investment,” Flynn continued. “There should be some pushback from Republicans who are tired of utilizing the SPR for political goals and providing short-term price relief in return for significantly higher prices afterwards.”
Since Biden took office in January 2021, his administration has released almost 260 million barrels from the SPR. In reaction to Russia’s invasion of Ukraine, the government sold a record-breaking 180 million barrels from the stockpile last year.
There were 638 million barrels in the SPR when Biden took office. There are around 371.6 million barrels as of this month, the lowest quantity since December 1983. With the current announcement to sell an additional 26 million barrels, stockpiles will fall to 346 million, the lowest level since August 1983.
The House recently passed legislation restricting future sales of reserve inventories, including prohibiting the federal government from selling oil reserves to China. The Republican majority in the House also enacted legislation that would boost domestic production by forcing the Department of Energy to create a plan to designate more federal land for oil and gas leasing before beginning a non-emergency drawdown from the SPR.
“The Administration is focused on refilling the SPR in a way that delivers the greatest value for taxpayers by attempting to buy crude at a lower price than it was sold for,” the DOE added.
Comments are closed.