WASHINGTON (Pakistan Point News / Sputnik - 05th May, 2022) The Biden administration plans to buy 60 million barrels of crude oil this fall in an initial bid to replace more than three times as much supply that was drawn from the US Strategic Petroleum Reserve (SPR), whose stockpile has declined to 20-year lows, CNN reported on Thursday.
This will be the first time since the early 2000s that the Energy Department has purchased large quantities of oil for the SPR, the report said.
Refilling the SPR will, however, take time, CNN said, adding that delivery of the first tranche of 60 million barrels will take place in "unspecified future years", and paid for with revenue received from ongoing emergency sales from the reserve.
President Joe Biden authorized his first major SPR withdrawal in November as oil supplies began tightening amid rapid recovery in demand from the coronavirus crisis that pushed up both crude and US fuel prices.
Over the past two months, the administration has taken 3 million barrels on the average out of the SPR every week to help meet domestic refiners' demand for crude in a market seeing a surfeit in fuel consumption amid strong economic recovery from the two-year long pandemic. Western sanctions on Russia, which have impeded supply from one of the world's largest oil producers, have added to the supply tightness in oil.
The administration's biggest SPR releases commence this month onward when it will issue a total of 180 million barrels from the reserve.
The US Weekly Petroleum Status Report released on Wednesday showed that SPR inventories stood at 550 million barrels during the week ended April 29. That was the lowest level of stockpiles in the reserve since December 2001.
Tight oil supplies pushed the global price of crude to 14-year highs of almost $140 a barrel in March and the pump price of US gasoline to a record high of above $4.30 a gallon. In Thursday's trade, London-traded Brent crude, which serves as the global benchmark for oil, hovered above $111 a barrel while gasoline retailed at $4.25 a gallon on the average across US pumps.
