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The Biden administration will not rush into refilling the strategic petroleum reserve but rather take things one day at a time, the White House’s Special Presidential Coordinator for Global Infrastructure and Energy Security, Amos Hochstein, has said as quoted by Bloomberg.
“We’ve seen a decline in oil prices, we’re seeing some crunch there,” Hochstein told Bloomberg TV in an interview.
“We should take a deep breath and wait and see how this crisis right now impacts the oil and gas industry, production and what the profile is. So far prices have come down. We’re watching it very closely, we’ll continue to watch it over the next several days.”
Last year, to arrest an inexorable climb in retail fuel prices, the White House announced a release of 180 million barrels of crude oil from the strategic petroleum reserve. Critics warned the move would have a limited effect on prices but compromise the energy security of the country by reducing the level of crude in the SPR.
The release, alongside other factors such as low demand and fears of demand destruction, did help to bring both fuel and oil prices down. In late 2022, the administration said it was going to start buying crude to replenish the SPR when prices fall to around $70 per barrel.
This week, West Texas Intermediate fell below that and was trading at close to $69 per barrel at the time of writing. It seems, however, that the Biden administration wants it even cheaper before it starts buying.
“Nothing happens overnight. You have to decide that this is the right environment, so therefore you wait to see where the prices are going to be landing,” Hochstein told Bloomberg.
The strategic petroleum reserve has 371.6 million barrels of crude in it right now. This is the lowest SPR level since the early 1980s.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.