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The Biden administration made plans to purchase 3 million barrels of crude oil public on Monday, kicking off a multi-year process to replace America's depleted emergency oil supply.
To replenish Big Hill, one of the four major oil storage sites along the Gulf Coast that make up the Strategic Petroleum Reserve, the Energy Department is seeking offers of crude oil.
The 3 million barrels, however, will represent a tiny fraction of the enormous volumes of oil released from the SPR in recent years.
President Joe Biden has aggressively depleted the SPR, the greatest store of emergency crude oil in the world, in response to skyrocketing petrol prices.
According to the US Energy Information Administration, the SPR contained around 638 million barrels of oil when Biden assumed office in January 2021. The current inventory of 362 million barrels is the lowest since October 1983.
For the first time since the early 2000s, the Biden administration announced a year ago that it would solicit bids to purchase tens of millions of barrels of crude oil for the Strategic Petroleum Reserve.
The exceptional oil production under Biden has reduced gas costs, but it has also reduced the government's rainy day reserve for potential future catastrophes like hurricanes, wars, and other disasters.
The Energy Department said that today's prices are significantly lower than the average of roughly $95 from 2022 and that the purchase of 3 million barrels of oil is part of an endeavor to rebuild stocks at a "good deal" for taxpayers.
Oil prices have dropped significantly since reaching a high of well over $100 per barrel during Russia's invasion of Ukraine due to recessionary worries, the Federal Reserve raising interest rates, and better-than-expected supplies from Russia and the United States. Currently, a barrel of oil costs about $71.
When oil prices are between $67 and $72 per barrel or less, the government has previously stated that it will begin to repurchase oil for the SPR.
The Energy Department sought to cancel 140 million barrels in congressionally required sales slated for the upcoming several fiscal years before making plans to buy oil public.
