President Joe Biden and his administration have just canceled a large oil purchase that was designed to help refill the Strategic Petroleum Reserve, the Washington Examiner reports.
The reader may remember that, under Biden's leadership, the reserve - which is our country's emergency stockpile of petroleum - reached its lowest level in 40 years.
It did so after Biden repeatedly tapped into the reserve to help address the soaring energy prices that the country was witnessing prior to the 2022 midterm elections.
In July, the U.S. Department of Energy (DOE) announced a plan to purchase 6 million barrels of oil to replenish part of the reserve.
"Today, the U.S. Department of Energy’s (DOE) Office of Petroleum Reserves announced that it plans to purchase about 6 million barrels of oil for the Strategic Petroleum Reserve (SPR), with receipts scheduled for October and November 2023," the July 7, 2023, announcement read, in part.
Now, however, the planned purchase has been called off.
It appears that the Biden administration has done so because the current price for a barrel of oil is too high.
The move was not a rejection of oil companies' offers to sell oil to the SPR but a decision made on "market conditions," the spokesperson said. The person [did] not specify what that meant, but tight oil supplies that have caused global oil prices to rise above $80 per barrel in recent weeks.
The outlet goes on to report that "The Biden administration has said it wants to buy back oil for the reserve when it costs $67 to $72 per barrel."
At the time of this writing, it is unclear when and if the price per barrel of oil will drop back down to this target amount. As Reuters points out, the price per barrel of oil has risen above $80, and experts are predicting that it will rise further in the coming months.
This raises the question, "When is the reserve going to get refilled?"
The answer is not clear.
The Daily Caller cites experts as indicating that "Aging infrastructure, higher oil prices, and budget constraints have impeded the administration’s efforts to substantially replenish the [reserve]."
Nonetheless, Reuters reports:
The Energy Department "remains committed to its replenishment strategy for the SPR" which includes direct purchases, returns of oil that was loaned to companies in the wake of hurricanes and other supply disruptions, and cancellation of planned sales where drawdown is unnecessary, in coordination with Congress, the spokesperson said.