Biden Reverses Course on Oil Plan

Joe Biden

( – In a new questionable decision, President Joe Biden’s administration has decided not to go ahead with a plan for refilling the Strategic Petroleum Reserve (SPR) after depleting it significantly since taking office.

On Wednesday, the administration announced its departure from last month’s plan to request bids for up to 3 million barrels for a Louisiana storage facility in August and September, Bloomberg reports, cited by The Daily Wire.

This decision arrives at a moment when the prices of crude oil have escalated to their highest points in several months, amid escalating geopolitical tensions.

The Department of Energy emphasized its commitment to prioritizing the financial interests of taxpayers.

“We will not award the current solicitations for the Bayou Choctaw SPR site and will solicit available capacity as market conditions allow. We will continue to monitor market dynamics,” it said.

The SPR, established in 1975, is described by the Energy Department as “the world’s largest supply of emergency crude oil … established primarily to reduce the impact of disruptions in supplies of petroleum products and to carry out obligations of the United States under the international energy program.”

The reserve’s volume reached its lowest point in several decades in 2022 following an announcement by the Biden administration of a 180-million-barrel withdrawal. This action aimed to mitigate the instability in global oil markets and address surging gasoline prices.

Recent figures have indicated that the SPR’s inventory stands at 363.6 million barrels, significantly less than its maximum capacity of 714 million barrels, after having exceeded 600 million barrels towards the end of 2021.

On Tuesday, the price of U.S. oil futures climbed to $85 per barrel, marking the first occasion since October to reach this level.

MarketWatch linked this rise to apprehensions over a potential direct confrontation between Israel and Iran following an attack in Syria that resulted in the death of a high-ranking Iranian commander. The analysis also referenced Ukrainian assaults on Russian oil infrastructures.

Since the latter part of 2022, the Biden administration has repeatedly committed to replenishing the SPR with crude oil.

Recently, the Energy Department reported its acquisition of 2.8 million barrels for a Texas facility, despite the purchase price of $81 per barrel being $2 above the desired U.S. price point.

This purchase contributes to a total of 32.3 million barrels of oil acquired for the SPR at an average cost of $76.98.

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