Crude oil storage tanks are seen in this aerial photo at the Cushing oil center in Cushing, Oklahoma, US. Photo/REUTERS/Drone Base
WASHINGTON – The administration of United States (US) President Joe Biden said Monday (13/2/2023) that it will proceed with the scheduled sale of 26 million barrels of crude from the country’s Strategic Oil Reserves (SPR).
The move comes after Russia’s announcement it would cut production by half a million barrels of oil per day next month.
“The move has been mandated by the US Congress and is consistent with the budget directives enacted in 2015 for the current fiscal year,” a US Department of Energy spokesperson said.
Last year, the Biden administration sold a record 180 million barrels of crude from the SPR in an effort to tame rising fuel prices.
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However, the Department of Energy had previously considered canceling a scheduled 26 million barrel sale this fiscal year to replenish emergency reserves after last year’s record draw saw the SPR reduced to just 371 million barrels, the lowest level since 1983.
The announced sale will bring reserves down to around 345 million barrels.
“Biden front-loaded SPR barrels to avoid a summer spike in fuel prices,” said Phil Flynn, an analyst at Price Futures Group.
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He added, “There is growing concern within the Biden administration that gas prices will return to $4 a gallon and the president fears the political heat he will have to take.”