Prior to next month’s legislative elections, the Biden administration intends to sell oil from the Strategic Petroleum Reserve, according to three persons familiar with the situation on Monday.
According to one of the sources, President Joe Biden’s declaration is anticipated this week as part of the response to Russia’s conflict on Ukraine.
The sale would allow Biden to market the final 14 million barrels of his previously announced and largest-ever release from the 180 million barrel reserve, which began in May.
According to a fourth source, the administration has also discussed selling an extra 26 million barrels from a sale that was required by Congress to take place in the fiscal year 2023, which started on October 1.
Further information regarding eventually purchasing the oil back will also be made public by the Department of Energy, reflecting the White House’s desire to counteract rising pump costs while assisting local drillers.
Inflation has reached its highest level in decades as a result of rising retail gas prices, endangering Biden and his fellow Democrats’ chances of retaining control of Congress in the midterm elections on November 8.
Last week, Biden warned that gas prices are out of control and that he would have more to say this week on bringing them down. The administration can use the Strategic Petroleum Reserve, or SPR, in the upcoming weeks and months if necessary to stabilise oil, according to David Turk, his deputy energy secretary, who also stated this last week.
According to the sources, the administration has discussed purchasing back oil from energy corporations through 2025 in order to replenish the SPR after Biden announced in March the largest sale ever—180 million barrels—from May to October.
Due to holidays and the hot weather in July and August, sales of the historic release of SPR oil were halted, leaving the Energy Department with around 14 million barrels still available for sale.
Additionally, a provision passed by Congress years ago requires the administration to sell an additional 26 million barrels of SPR oil in fiscal year 2023, which began on October 1, and one of the individuals indicated that sale is expected to happen soon.
According to a source familiar with White House discussions, “the administration has a tiny window before the midterms to try to cut fuel prices, or at least indicate that they are trying.” “The White House hinted that it will take action to prevent that from happening again. It did not enjoy $4 per gallon gas.”
According to the AAA automotive club, the national average price of gasoline in the United States reached $3.89 per gallon on Monday, up nearly 20 cents from one month prior and 56 cents from this time last year. In June, the average price of gas surpassed $5.00 for the first time.
Requests for comment regarding the sales were not immediately answered by the DOE or the White House.
The DOE announced in May that it would begin accepting bids in late 2018 for a buyback of around one-third of the 180 million barrel sale. After fiscal year 2023, which concludes on September 30 of the following year, it was implied that deliveries would be correlated with falling oil prices and declining demand. The buy-backs might continue through 2025, according to two sources.
In recent months, Biden officials have also encouraged oil refiners, including as Exxon Mobil, Chevron, and Valero, to refrain from increasing fuel exports and have threatened to take action if plants do not raise stockpiles.
The administration has not taken a potential ban of gasoline and diesel exports off the table although opponents of such a move say it could exacerbate Europe’s energy crisis and raise fuel prices at home
