Biden Ready To Use SPR Again If Oil Prices Rise

Several weeks after we reported that – very unsurprisingly – the Biden admin had halted its laughable attempts to refill the SPR as oil prices soared (having missed its entire window to do so when WTI was trading in the low $70s), we speculated that it may be only a matter of time before the senile president decides to start draining the strategic reserve all over again to keep gas prices low ahead of the election.

WTI $87
Brent $92

Biden about to drain remainder of SPR

— zerohedge (@zerohedge) April 12, 2024

Now we get confirmation of just that: as OilPrice reports, President Biden will use crude oil from the strategic petroleum reserve should the need arise, energy adviser Amos Hochstein has said, noting there was enough oil in the reserve, which of course is true but what it misses is that under Biden the SPR has already been drained by half.

“We have been replenishing into the SPR for the last several months. I think we have sufficient supply in the SPR to address any kind of concern in the economy if we need it,” Hochstein said, speaking at the Milken Institute Global Conference, as quoted by Reuters. And by “replenishing” he meant refilling 15 million barrels after draining almost 300 million for purely political purposes.

The U.S. saw the stockpiles of crude oil in the SPR fall from 638 million barrels at President Joe Biden’s inauguration to just 347 million barrels by the summer of 2023 as the administration tried to bring down gasoline prices for consumers by releasing over 180 million barrels from the SPR.

Recently, talk has restarted about the possibility of using the SPR to bring down retail fuel prices in case the conflict between Israel and Hamas escalates, leading to higher oil prices and, consequently, higher gasoline and diesel prices for U.S. drivers.

Since rising fuel prices are the last thing a president running for a second term wants to experience in an election year, SPR releases were seen by many as the most likely course of action. This, in turn, prompted questions about whether there is enough oil in the SPR since the federal government’s replenishment efforts have been quite sporadic due to prices. Several offers for the purchase of 3 million barrels have been canceled already because prices got too high for the Department of Energy, which had set itself a ceiling of $79 per barrel.

As of January, the DoE had bought back some 32.3 million barrels out of the more than 180 million barrels that were released in 2022. In addition to those volumes, the Department of Energy is getting back some 4 million barrels that were lent to energy companies. The volume in the SPR as of January was about 364 million barrels.