The Biden administration hopes to buy back at least 12 million barrels of oil for the Strategic Petroleum Reserve this year, including six million already announced, a source familiar with the matter said on Tuesday.
The administration is slowly buying back oil from the SPR after selling more than 200 million barrels last year including a record 180 million barrel sale to fight high oil prices after Russia’s invasion of Ukraine. The sales have pushed levels in the reserve to the lowest since 1983.
On Friday, the Department of Energy said that five companies including Exxon sold 3.1 million barrels to the SPR for delivery in August and announced a new solicitation for 3 million barrels for delivery in September.
The administration “will continue to seek opportunities for additional repurchases as market conditions and the constraints of SPR operations allow,” a DOE spokesperson said.
Two of the reserve’s four sites, Bayou Choctaw, in Louisiana, and Bryan Mound, in Texas, are expected to be in maintenance until late this year, limiting buy backs to the reserve.
While the United States is far less dependent on oil imports than it was in 1983, the low level in the SPR has been a focus of Republicans who say that President Joe Biden, a Democrat, has put energy security at risk. The reserve currently holds about 351.7 million barrels.
The sales also became an sore point in relations with Saudi Arabia by pushing down prices for the kingdom’s top export.
The Biden administration said it paid an average price of $73 per barrel for the oil to be delivered in August, which the administration said compared to an average of about $95 per barrel the crude it sold last year.
West Texas Intermediate settled at $69.42 on Tuesday, up about 3.4% on hopes for growing fuel demand in China, after its central bank lowered a short-term lending rate for the first time in 10 months.
(Reporting by Timothy Gardner in Washington and Rahat Sandhu in Bengaluru; editing by Jonathan Oatis and Stephen Coates)