White House eyes SPR release again as oil prices stay above $90/b
The Biden administration signaled Feb. 22 that it was preparing for a globally coordinated release of crude stockpiles as tensions between Russia and Ukraine keep oil prices above $90/bbl.
The International Energy Agency said on February 22 that member countries “stand ready to act collectively to ensure that global oil markets are adequately supplied.”
IEA members hold nearly 4.16 billion barrels of total oil inventories at the end of 2021, including 1.5 billion barrels held by governments as emergency reserves. The group of the world’s major oil consuming countries requires its members to hold 90 days of net imports in government or commercial storage.
The Biden administration has “an ongoing effort right now to execute a plan that is in coordination with oil producers and consumers to make sure the world knows we are going to have stable energy supplies,” a senior said. manager during a phone call.
“I expect other countries to tell you about this coordination effort very soon,” the official added.
SPR lowest since 2002
Bob McNally, chairman of Rapidan Energy Group and former energy adviser to President George W. Bush, said statements from the White House and the IEA pointed to a possible release of stocks to come.
“It looks like coordination planning is advanced, if not about to be executed,” he said.
Brent and WTI oil futures have climbed towards $100/barrel in recent weeks as Russian-Ukrainian tensions pose major risks to energy markets, while optimism over a possible deal on the Iranian nuclear has slowed the rise in recent days.
In November, President Joe Biden ordered the release of 50 million barrels from the US Strategic Petroleum Reserve when WTI prices were around $78/bbl.
The US SPR held 584.8 million barrels as of February 11, the lowest since September 2002.
Energy prices are the main driver of U.S. inflation, which is testing Biden ahead of November’s midterm elections that will determine congressional control and could limit Democrats’ hopes for a green agenda.