Oil Acquisition: On Tuesday, an Energy Department spokesperson stated the Biden administration had withdrawn its offer to acquire 6 million barrels of oil for the Strategic Petroleum Reserve (SPR). Saudi Arabia’s production decrease will raise oil prices. Because Saudi Arabia raised oil prices, this decision was made.
The administration didn’t reject oil company offers because it had just bought 6.3 million barrels of sour crude oil for the SPR and released a record 180 million barrels the year before to keep prices stable in response to Russia’s invasion of Ukraine. The government purchased 6.3 million barrels of sour crude oil for the SPR. Instead, the decision was based on market conditions, albeit details were not disclosed. A barrel of oil has recently cost more than $80 worldwide due to tightening oil supplies. Fewer oil sources are raising prices.
The Saudi Arabian government’s announcement that it will restrict oil output by 1 million barrels per day in July has made oil prices more likely to rise in the coming months. Saudi Arabia announced it would limit production on July 1. In April, eight OPEC and other countries announced production cuts.
The American Petroleum Institute reported a 15.4 million barrel reduction in crude oil storage in the week ending July 28.
The Joe Biden administration planned to acquire oil for the Strategic Petroleum Reserve at $67 to $72.
The Energy Department follows this SPR replenishment plan. Direct purchases and returning oil borrowed to companies during hurricanes and other supply issues are included. When drawdown isn’t needed, cancel sales. Congress leaders are aiding this scheme. Because so much oil was sold last year, SPR oil levels are at their lowest point in over 40 years, even though the US produces more crude oil. Despite increased crude oil production, this is still true.