The federal U.S. government could begin buying crude oil to refill the strategic petroleum reserve this fall, the President’s special coordinator for global infrastructure and energy security has said.
“I think as we get into the early fall, if prices are in the right place, we are still 100% committed to replenishing the SPR over a period of time,” Amos Hochstein said, as quoted by Bloomberg, in what appears to be the latest episode in a series of back-and-forth on the SPR’s refilling between the White House and the Department of Energy.
Last month, Hochstein had a different message about the SPR, saying the administration was in on rush to start buying, despite the dip in oil prices.
“We’ve seen a decline in oil prices, we’re seeing some crunch there,” Hochstein told Bloomberg TV at the time.
“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,” he also said in early March.
Then, later the same month, Energy Secretary Jennifer Granholm said the refilling of the strategic petroleum reserve could begin later this year. This happened just days after she had suggested the refilling of the SPR could take years.
“We will begin that process this year but to refill the full amount is impossible to do in one year,” Granholm said, as quoted by Reuters, noting that two storage sites for the SPR were undergoing maintenance, which has constrained their capacity.
In October of last year, the administration announced that it would repurchase crude oil for the reserve when prices were at or below about $67-$72 per barrel. The move would be dual purpose in that not only would it replenish the nation’s depleted reserves, but it would boost demand when prices were low instead of sending them into orbit at a time of regular prices.
Oil prices have been trending lower this week, heading back toward levels not seen since OPEC+ shocked markets with a major production cut.
Source: https://oilprice.com/