(Bloomberg) — The Department of Energy says its plan to restock the nation’s emergency oil supply doesn’t include a trigger price, and that such deliveries aren’t likely to occur until after fiscal 2023.
Most Read from Bloomberg
Bloomberg News reported Tuesday that administration officials have discussed refilling the Strategic Petroleum Reserve, or SPR, when crude prices dip below $80 a barrel, with an eye toward protecting US oil-production growth and preventing oil prices from plummeting.
In a statement released Wednesday, the Energy Department pointed to its previously released plans.
“Claims that we are currently considering buying oil once it dips below $80 a barrel are inaccurate,” Charisma Troiano, a department spokeswoman, said in the statement. “The Department of Energy proposed an approach months ago to replenish the Strategic Petroleum Reserve, and that approach does not include any such trigger proposal. As we said then, we anticipate that replenishment would not occur until well into the future, likely after fiscal year 2023.”
However, administration officials say that discussions of oil repurchasing are preliminary. Officials are weighing the timing of such a move, with an eye toward protecting US oil-production growth and preventing crude prices from plummeting, said the people, who asked not to be named sharing internal deliberations.
The discussions come as West Texas Intermediate, the US oil benchmark, plunged to almost $81 a barrel last week, its lowest level since January. It closed at $88.48 on Wednesday.
President Joe Biden in March ordered the release of an historic 180 million barrels from the SPR, an effort to tame skyrocketing energy prices following Russia’s invasion of Ukraine. Officials are now aiming to slow those releases to keep the market in check heading into the winter. The administration is also looking to protect US oil-production growth and prevent crude prices from plunging, according to people familiar with the matter.
The discussions come just two years after Democrats blocked former President Donald Trump from filling the reserve at a fraction of current prices. In March 2020, looking to stabilize the oil industry after Covid-19 hit in 2020 and crushed global petroleum demand, Republicans proposed spending $3 billion to fill up the SPR, at a time when prices were at about $24 a barrel.
But the idea became a political football in larger negotiations on trillions in coronavirus relief, with Senate Democratic Leader Chuck Schumer proclaiming that his party had blocked a “bailout for big oil.”
Most Read from Bloomberg Businessweek
©2022 Bloomberg L.P.
