The Biden administration has taken another step to stabilize the oil market by purchasing 6 million barrels of crude oil for the Strategic Petroleum Reserve (SPR). This purchase, which comes at an average price of $68.56 per barrel, is part of a larger effort to replenish the SPR after the administration released over 100 million barrels in 2022 to address the oil supply shock caused by the Russia-Ukraine conflict.
The administration’s decision to release oil from the SPR in 2022, when oil prices soared above $100 per barrel, helped calm the market and bring prices back to more normal levels. The SPR releases led to a decrease of 40 cents per gallon in gas prices, according to the Department of Energy.
The administration’s focus has now shifted to replenishing the SPR, taking advantage of periods of weakness in the oil market. This latest purchase brings the total amount of oil purchased for the SPR since last year to over 55 million barrels.
The administration’s moves have been met with positive reactions from some experts. Todd Campbell, the editor-in-chief of TheStreet, has called this move “one of the best oil trades in history.” These actions highlight the role governments can play in stabilizing markets during times of uncertainty.
While the SPR remains below its pre-invasion levels, the administration’s actions demonstrate a commitment to managing oil supply and protecting consumers from price volatility. The administration’s efforts to replenish the SPR are likely to continue as the global energy landscape remains uncertain.
