President Biden has released more crude oil from the Strategic Petroleum Reserve (SPR) as part of a mission to artificially suppress fuel prices ahead of the midterm elections than any of his predecessors since the SPR was created in 1973.
Draining the reserves — stored in salt caverns along the US Gulf Coast — has been a powerful tool for the administration to tame fuel prices. It also signals a “new era” of intervention the White House is willing to take to manage global prices.
Last week, Biden ordered another SPR sale of 15mm barrels of oil in December and also laid out plans to refill the dwindling emergency stockpile.
“I think we are in a new era of much more nimble and deft use of the SPR as both a market and a geopolitical tool,” David Goldwyn, a former senior energy official in the Obama years, told Financial Times.
Biden recently said SPR releases would “continue to stabilize markets and decrease the prices at a time when the actions of other countries have caused such volatility.” He made clear it was “not politically motivated at all,” though his critics disagree:
“Draining oil from the strategic reserve is a short-sighted and dangerous choice that imperils our energy security at a critical time of global uncertainty,” Jerry Moran, the senior US Republican senator from Kansas, wrote in a recent letter to the president.
House Minority Leader Kevin McCarthy also made remarks about Biden’s SPR releases, indicating they’re intended to “manipulate an election” and are “putting the whole country at risk.”
“The Strategic Petroleum Reserve was designed for an emergency time period. He’s using it trying to manipulate an election,” McCarthy said.
To date, Biden has dumped more SPR on the market than all previous presidents combined. The SPR is at levels not seen since the early 1980s.
… and there are only 22 days worth of supply.
Biden’s announcement of the latest SPR drawdown follows production cuts announced by OPEC+ countries.
The SPR was established to reduce short-term market disruptions though it has become a political and geopolitical tool for the Biden administration. Remember, in August, Biden touted the “fastest decline [in gas prices] in over a decade” following months of SPR releases. Draining the SPR for non-emergencies to lower prices for short-term political gains should not be a substitute for long-term policies to boost domestic crude supplies.
The White House’s approach to intervening in domestic and international markets shows just how desperate they’re to manage global crude prices.
