Biden's SPR Policy Faces New Risks

Copyright © 2023 Energy Intelligence Group All rights reserved. Unauthorized access or electronic forwarding, even for internal use, is prohibited.
Rena Schild/Shutterstock

The Biden administration’s bold use of the Strategic Petroleum Reserve (SPR) helped tame oil prices last year, but the policy now faces greater scrutiny and challenges. With Republicans in control of the House of Representatives at home, and Opec-plus pushing back at US intervention in global oil markets, the White House faces more sensitive politics around use of the emergency stockpile after last year’s record sales. For now, the biggest consideration for Biden's SPR policy seems the risk it poses to relations with Opec-plus, where some see it as challenging their role in the oil market. The SPR sales were viewed as contributing to a deterioration of US-Saudi relations last October. While those tensions have since eased, there remain differences over energy policy between the climate- and Russia-focused White House and Riyadh, and any oil price rebound could test the relationship again. For now, with oil prices tamer, the White House would like to shift its focus to refilling the SPR, which now contains about 372 million bbl of oil — the lowest level since the 1980s. But SPR policy could climb the political agenda again if US gasoline prices continue to rise. Average pump prices are back around $3.60 per gallon — well below the $5 peak seen last June, but up 40¢ since late December.

Policy and Regulation, Oil Inventories, Opec/Opec-Plus, Oil Supply, Oil Prices
Wanda Ad #2 (article footer)
Production and exports from Iran and Venezuela are rising amid speculation that the US may be taking a more lax approach to sanctions enforcement.
Thu, Sep 21, 2023
Egypt has launched a new upstream bid round for 23 blocks as it faces amid a looming gas supply crunch.
Mon, Sep 25, 2023
Companies are not indifferent to Indonesia's large resources and recent efforts to improve its business climate, but time is still needed to fully convince changes will stick.
Mon, Sep 25, 2023