The Biden administration announced on Monday plans to sell another 26 million barrels of oil from the Strategic Petroleum Reserve to prevent a rise in fuel prices, Fox Business Network reported.
The sale was mandated by the Bipartisan Budget Act of 2015 and the Fixing America’s Surface Transportation Act, which were enacted by Congress during the Obama administration.
The barrels are set to hit the market from April to June, just as fuel prices are predicted to increase due to the summer driving season.
“Biden is front-loading SPR barrels to avoid a summer gasoline price spike,” Phil Flynn, an analyst at Price Futures Group, told Fox Business Network. “There are growing concerns among the Biden administration that gas prices are headed back to $4 a gallon, and the president is fearful of the political heat he will have to take.”
“By pushing barrels forward from previously announced sales he is robbing Peter to pay Paul but is discouraging future U.S. oil and gas investment,” Flynn added. “There should be some backlash from Republicans who are getting tired of using the SPR for political purposes and creating short-term price relief in exchange for much higher prices down the road.”
The current administration has released more than 260 million barrels from the SPR since Biden took office in January 2021. Last year alone, the administration sold a record-breaking 180 million barrels from the reserve in response to Russia’s invasion of Ukraine.
When Biden took office, there were 638 million barrels in the SPR. As of this month, there are approximately 371.6 million barrels, the lowest amount since December 1983. With the latest announcement to sell another 26 million barrels, inventory will drop to 346 million, the lowest since August 1983.
The House recently passed bills that would restrict future sales of reserve inventory, including preventing the federal government from selling oil reserves to the Chinese government. The Republican majority in the House also passed legislation that would increase production in the United States by requiring the Department of Energy to develop a plan to allocate more federal land for oil and gas leasing prior to initiating a non-emergency drawdown from the SPR.
“The Administration is focused on replenishing the SPR in a way that provides the best deal for taxpayers by aiming to repurchase crude at a lower price than it was sold for, while providing certainty to the industry in a way that helps encourage near-term production,” the DOE stated.
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