It is part of the plan for the Strategic Petroleum Reserve. The country at its lowest point.
Three days ago, the Joe Biden administration announced that he is in talks to purchase 6 million barrels of crude oil. This is a plan for the Strategic Petroleum Reserve with the idea of increasing the reserves that are counted for emergencies.
These purchases will take place in October and November. It should be noted that the country is at an extremely critical moment. Reserves are at their lowest point in 40 years. Russia’s invasion of Ukraine precipitated this reduction, which is undoubtedly historic and which finds the United States with 180 million barrels less.
The expectation is focused on the purchase of 12 million new barrels this year. To these are added the 3.2 million that will be delivered in September and that were purchased at $71.98 per unit, according to information published by the Department of Energy.
This same Department hopes to be able to buy more crude oil to the extent that the market allows it. A goal that the European countries where the scarcity hits them the hardest also have.
What is the Strategic Petroleum Reserve (SPR)?
“It is the world’s largest supply of emergency crude oil, it was established mainly to reduce the impact of interruptions in the supply of petroleum products and to comply with the obligations of the United States under the international energy program. Federally owned oil stocks are stored in huge underground salt caverns at four sites along the Gulf of Mexico coast. The sheer size of the SPR (authorized storage capacity of 714 million barrels) makes it a significant deterrent to oil import cuts and a key foreign policy tool”, it is reported in the Department of Energy.
The description continues: “SPR oil is sold competitively when the president determines, pursuant to the conditions set forth in the Energy Policy and Conservation Act (EPCA), that a sale is required. Such conditions have only existed three times, most recently in June 2011 when the president ordered the sale of 30 million barrels of crude oil to make up for supply disruptions due to unrest in Libya. During this severe power disruption, the United States acted in coordination with its partners at the International Energy Agency (IEA). The IEA countries jointly released a total of 60 million barrels of oil.