US May Risk Draw Down Of Million Of Barrels US Oil Reserve
The Strategic Energy Reserve is the US government’s energy facility if the nation does not have enough access to crude. Its locations are spread around the country. As the world’s largest such reserve, it can contain 716 million barrels of crude.
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In 2022, the government sold about 180 million barrels to keep gas prices low as Russia’s invasion of Ukraine drove crude to $120. According to several sources, there is about to be another drawdown, as crude has topped $90 toward $95. Tension in the Middle East could push the price well above $100.
“The president did it (release oil from SPR) before … and I think he wants to keep the price of gasoline affordable and he will do what he can to make sure that happens,” White House senior adviser John Podesta said. High gas prices and resulting inflation could hurt the President’s chances in the November election,
The open question is how large the drawdown should be. According to Bloomberg, the reserve is currently at 363 million barrels, down from 600 million just over two years ago. A plan to begin to replace the deficit has been put on hold because of the high price of crude.
So, the government needs more oil but does not think it can afford to replace it–at least at a reasonable cost.
