Last Updated on October 7, 2022
President Biden is evaluating options on how to best counter OPEC’s recently announced production cuts. The administration could decide to release more oil from the Strategic Petroleum Reserve (SPR), an emergency stockpile created after the 1970’s Arab oil embargoes. Biden has already leaned on the strategic reserve — which is currently stocked at its lowest level since the 1980’s — in order to keep gas prices in check over the last six months.
Earlier this year, the Biden Administration announced that 180 million barrels from the reserve would be sold for six months beginning in May. Gas prices were surging past nationwide records at the time of the announcement.
Last month, the administration extended the duration of the sale into November, as only about 155 million of the earmarked 180 million barrels had been sold, according to a report from Reuters.
As a result of the SPR releases — some of which were sold to communist China and other foreign entities — the amount of oil in the reserve has fallen to its lowest level since 1984.
The SPR still holds enough oil to meet requirements under an agreement in the International Energy Agency, Reuters reported. Additional sales could raise worries that the reserve is getting too thin to properly address another massive global supply disruption.
Biden’s Department of Energy has repeatedly chastised major U.S. Oil Companies for exporting large quantities of fuel while consumer prices remain high. As a result, the oil industry has become increasingly wary that the administration will attempt to oppose a ban or limitation on U.S. energy exports. Such an action would undermine the free market and make U.S. oil companies less competitive, critics say.
The Department of Energy has said the option is not currently being considered, but remains on the table.