Biden Delays SPR Refill Again, Now Says Must Wait For Storage Repairs First
Last November, when there were still tens of millions of extra barrels in the US Strategic Political Petroleum Reserve, we joked that not only would the historic drain by the Biden administration not reverse - contrary to what the senile occupant of the White House would read from his cue cards on occasion - but that the drains would continue until the salt caverns collapsed.
The drains will continue until the salt caverns collapse https://t.co/pSxiJjzlQT
— zerohedge (@zerohedge) November 30, 2022
It was supposed to be a joke, but like everything else relating to the Biden admin, it may not have been.
That's because according to Bloomberg, months and months after vowing it would start refilling the SPR when oil dropped to a price where energy tzar Hunter Biden would be waving it in, the Biden administration "plans to begin purchasing oil to replenish the nation’s emergency reserve after completing maintenance work later this year."
Here a bunch of questions immediately pop up: why not buy oil futures today, for delivery 1 year from now, or 2 years, or 3 years, etc. After all, that was precisely what Biden promised to US energy producers who, it turns out, were absolutely correct not to believe the lies. Or, for that matter, what maintenance is required to the deep underground salt caverns where the SPR is stored? Did the White House's aggressive SPR drain truly damage them - as we joked last November it would.
In other words, just another excuse not to do so now, because even the absolute amateurs that surround Biden know that with the oil market the most illiquid it has ever been, the moment a government bid steps in, oil will soar back into the triple digits.
“The SPR remains the largest in the world and DOE remains committed to refilling the SPR in a manner that will deliver the best value for American taxpayers and protect US national (and economic) security interests, while abiding by congressional mandates and undertaking necessary maintenance that is also part of good stewardship,” the Energy Department lied on Tuesday, but since few are aware that China's SPR is now far bigger than the US equivalent, it's not like anyone will counter.
In addition to direct purchases, the department said part of its strategy for replenishing the reserve includes a return of oil from previous exchanges requested by refiners facing disruptions earlier this year and avoiding “unnecessary sales unrelated to supply disruptions.”
While the department cancelled some 140 million barrels of oil sales mandated by Congress via a government funding bill last year, the past few weeks have seen continued SPR drains anywhere between 1.5 and 2 million barrels, the latest attempt to lower oil prices and offset the recent OPEC+ output cut.
