Biden’s administration plans to sell oil from the Strategic Petroleum Reserve in a bid for oil ahead of next month’s parliamentary elections, three sources familiar with the matter said on Monday.
President Joe Biden’s announcement is expected this week. as part of Russia’s response to the Russian war on Ukraine. One source said.U.S. can sell emergency oil reserves to lower prices.
The sale will market the remaining 14 million barrels from Biden previously announced and the largest ever released from reserves of 180 million barrels starting in May.
The administration has also been in talks with oil companies about selling an additional 26 million barrels from the congressional-mandated sale for fiscal 2023 beginning Oct. 1, a fourth source said.
The Department of Energy will eventually release more details on the oil buyback. This reflects the White House’s desire to combat soaring pump prices while supporting domestic oil drillers.
Rising retail oil prices have boosted inflation to the highest in decades. Risking Biden and other Democrats ahead of the Nov. 8 midterm elections in which they try to control Congress.
Biden said last week’s gasoline prices were too high and he would say more about cutting costs this week. Deputy Energy Minister David Turk said last week whether management could touch strategic petroleum reserves or SPR in the next few weeks or months as needed to stabilize the oil.
Management has been in talks with energy companies about buying oil back until 2025 to top up SPR, the sources said. After Biden in March announced its largest-ever sale of 180 million barrels from May to October.
The Department of Energy still has about 14 million barrels of SPR oil left on sale from its historic launch. This is because sales have slowed in July and August due to holidays and hot weather.
The administration was also mandated by congressional law several years ago to sell another 26 million barrels of SPR oil in fiscal year 2023 beginning Oct. 1, with sales expected soon, the source said. one said
“Management has a small window. Before the midterm exam to try to reduce the price of gas Or at least it shows that they are trying,” said a source familiar with the White House hearings. “The White House doesn’t like $4 a gallon of oil. and has signaled that action will be taken to prevent it from happening again.”
The average U.S. gasoline price hit $3.89 a gallon on Monday. It’s up about 20 cents from last month and 56 cents higher than a year ago at this time. According to AAA Motor Group, oil prices averaged above $5.00 in June.
The DOE and the White House did not immediately respond to requests for comment about the sale.
In May, the DOE said it would launch an auction later this year to buy back about a third of the 180 million barrels it sold. It is likely after fiscal year 2023, which ends on September 30 next year. Two sources said the buyback could continue until 2025.
Biden officials in recent months have also urged refineries including Exxon Mobil, Chevron and Valero not to increase fuel exports and warned them that action could be taken if the plants did not build up inventories.
The administration has not banned potential exports of gasoline and diesel, although opponents of the move say it could exacerbate Europe’s energy crisis and raise oil prices at home.