The US Strategic Petroleum Reserve (SPR) has fallen below the key 400 million-barrel mark as the Biden administration keeps drawing down crude from the SPR to keep fuel prices low in the United States even as global producers under the OPEC+ alliance slash production to get higher revenues for their oil, government data showed on Wednesday
WASHINGTON (Pakistan Point News / Sputnik - 02nd November, 2022) The US Strategic Petroleum Reserve (SPR) has fallen below the key 400 million-barrel mark as the Biden administration keeps drawing down crude from the SPR to keep fuel prices low in the United States even as global producers under the OPEC+ alliance slash production to get higher revenues for their oil, government data showed on Wednesday.
As of the week that ended on October 28, the SPR's balance stood at 399.8 million barrels, the lowest level since May 1984. The Biden administration has drawn down some 240 million barrels from the SPR over the past year to alleviate a global deficit in crude supply that could send prices at the pump in the United States spiraling.
Prices at the pump did hit record highs of just above $5 per gallon in mid-June as fuel consumption in the United States peaked at the height of summer, but they have since decreased, averaging below $4 per gallon.
President Joe Biden has taken much heat from rival Republicans who have accused him of risking the nation's emergency oil reserves to try and appease voters and defend the Democrats' control of the Senate and the House of Representatives. The US midterm elections are on November 8 and polls so far indicate that the Democrats could lose control of either or both chambers of Congress.
"The SPR is likely to become an even hotter political potato now that the reserve has fallen below the 400 million-barrel mark," John Kilduff, partner at New York energy hedge fund Again Capital, said.
Criticism against Biden's use of the SPR has also come from abroad. Saudi Energy Minister Abdulaziz bin Salman has cautioned about the pitfalls of using national oil reserves to keep a lid on market prices of both crude and fuel.
"It is my profound duty to make clear to the world that losing (releasing) emergency stocks may be painful in the months to come," the minister said at an industry conference in Riyadh last month.
Abdulaziz's remarks came after Biden announced in October an additional release of 15 million barrels from the SPR this month to coincide with the 2 million barrels per day cut in global oil supply announced by the OPEC+ alliance of global oil producers. Saudi Arabia and Russia are the main players in OPEC+.
Crude prices, as measured by global benchmark Brent, hit 14-year highs of almost $140 per barrel in March, after early supply disruptions caused by the Ukraine conflict. Prices have since come down to below $100 per barrel.
Biden has defended his administration's use of the SPR saying his priority is alleviating the hardship of Americans suffering from the worst inflation in 40 years, contributed significantly by high energy prices.
