Some officials within the Biden administration reportedly fear the possible return of high gas prices, especially given their decision to release huge quantities of oil from the strategic petroleum reserve (SPR) in 2021 and 2022, The New York Times reported Wednesday.
Biden administration officials are sensitive to the possibility that gas prices could exceed $5 per-gallon again, which occurred briefly in 2022, according to the Times. The administration tapped into the SPR to bring down prices then, but they have not offset those releases, and the steps taken to bring down gas prices in 2022 may not work as effectively this time around in the event of a fresh price shock.
Biden opted to release 180 million barrels of oil from the SPR in late 2021 and 2022 as fuel prices skyrocketed for Americans, which caused a political headache for Biden and other Democrats in the months leading up to the 2022 midterm elections. Approximately 6 million barrels released from the SPR since July 2021 were ultimately sold to China.
The SPR has about 350 million barrels of supply left, and some officials are confident that future releases remain a viable option should prices spike again, the Times reported.
The SPR is at its lowest levels since 1983, and the Department of Energy (DOE) decided against replenishing it in August, citing unfavorable market conditions when prices hovered at levels above $80 per barrel. In July, numerous energy experts warned that it could take “decades” to refill the SPR after Biden’s releases.
Now that geopolitical instability has engulfed the Middle East again, the administration’s 2021 and 2022 SPR releases have come back into focus, with some experts previously telling the Daily Caller News Foundation that the U.S. is now in a vulnerable position if the Israel-Hamas war expands or otherwise disrupts the global oil market.
“There’s another arrow in the quiver, but there’s only so many arrows right now,” Jim Burkhard, head of energy markets research for S&P Global Commodity Insights, told the Times. “Could they repeat it? Yes, but then you’re left with much, much less oil.”
Democrats slammed the Trump administration in 2020 for attempting to top off the SPR at a time when prices were around $25 per barrel as COVID-19 lockdowns slashed demand, saying that a replenishment would be a handout for Big Oil. Last week, the Department of Energy (DOE) announced that it wants to buy millions of barrels to replenish the SPR at a price point of $79 per-barrel.
The spot price for a barrel of West Texas Intermediate crude oil on Wednesday stood at about $86, according to Commodity.com
The White House and the DOE did not respond immediately to requests for comment.
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