Friday’s announcement by the Energy Department indicated that oil would be purchased to replenish the U.S. Strategic Petroleum Reserve (SPR). This is despite the White House stating that oil would be bought back at a price between $67 and $72.
According to an official press release, the Energy Department announced that it would begin to buy crude oil at a lower than the $96/barrel average price barrels were sold for in order to secure a “good deal for taxpayers”. The White House stated in October that oil would be bought back by the department once it reached $67-$72 per barrel. This plan was hailed as a win for taxpayers.
According to Business Insider, Brent crude oil closed at $81.21 per barrel on Thursday. This is the benchmark global crude price.
In March, President Joe Biden started draining the SPR to lower gas prices. This was in response to energy shortages that were exacerbated by Russia’s invasion of Ukraine. According to the Energy Information Administration, gas prices are still at 86 cents per gallon, despite the nation’s emergency oil reserves being at their lowest level in 1984.
The Energy Department will offer contracts to oil companies who bid to sell their oil to the Biden administration no later than December 28th, 2023. According to the White House, such deals will encourage domestic production and lower energy costs.
According to The Wall Street Journal, the Biden administration has granted federal oil and gas leases on the most acres since the 1940s. According to the Dallas Federal Reserve’s June survey, although Biden has criticised fossil fuel producers for not producing enough fuel to bring down the prices, energy executives think that the administration’s negative attitude towards the industry is reducing investment.
The Daily Caller News Foundation asked for comment, but the White House didn’t immediately respond. The DCNF was referred to the Energy Department by its press release.
