Biden administration delays replenishing U.S. emergency oil reserve

(Bloomberg) – The Biden administration is again delaying a replenishment of the nation’s emergency oil reserve because of market conditions, according to people familiar with the matter. The decision comes as oil prices have rallied above $80 a barrel.

The Department of Energy is not taking up offers it got for a potential purchase, said the people, who asked not to be identified as details of the process haven’t been published. The administration rejected offers in January.

“The DOE remains committed to its replenishment strategy for the SPR, including direct purchases when we can secure a good deal for taxpayers; exchange returns; and cancellation of planned sales where drawdown is unnecessary, in coordination with Congress,” Energy Department Deputy Chief of Staff Bridget Bartol said.

U.S. officials are working to refill the Strategic Petroleum Reserve after a historic 180 MMbbl drawdown ordered by President Joe Biden brought it to about half of its capacity as he sought to tame high gasoline prices in the aftermath of Russia’s invasion of Ukraine.

The Biden administration has stated that it would buy crude when it dropped to around $67 to $72 a barrel. West Texas Intermediate futures climbed above $80 a barrel last week as supplies have tightened thanks to production cuts by OPEC and its allies. Demand has largely held up despite rising interest rates.

The Energy Department has purchased back oil at profit twice before. This is the fourth round of bids.