President Joe Biden's administration is evaluating more crude sales from the US Strategic Petroleum Reserve (SPR) and other options in the wake of Opec+'s decision to cut output.
The administration will be doing "everything we can" with the tools it has to put downward pressure on crude prices and to support affordability, US deputy energy secretary David Turk said. Those tools include the potential for more crude sales from the SPR, he said.
"I feel quite good with what we've done with the Strategic Petroleum Reserve," Turk said today at an event held by news company Axios. "That has had a downward pressure on the market. We still have some additional ability to use the Strategic Petroleum Reserve over the coming weeks and months as needed."
Turk said the sale last week of 10.15mn bl of crude from the SPR, for delivery in November, should put further downward pressure on the market. The latest sale will put the US on track to draw down 165mn bl through emergency sales, out of 180mn bl that Biden approved earlier this year as a "wartime bridge" after Russia invaded Ukraine.
The US is separately required under laws enacted in 2015 to sell another 26mn bl from the SPR to raise revenue by 30 September 2023, although the White House has been asking lawmakers to enact legislative language offering flexibility for the sales to be deferred.
Opec+ last week agreed to reduce collective crude production targets by 2mn b/d, drawing outrage from the White House and increased potential for new legislation targeting Opec. Turk said the production cuts were "misguided" and would cause the most harm in countries who are "least able to withstand these types of price increases."
The White House has held extensive conversations, including over this weekend, on the tools it might use to keep prices affordable and when administration might use them, Turk said. US energy secretary Jennifer Granholm this summer told refiners if they did not sufficiently build product inventories in the US, the administration would consider "federal requirements or other emergency measures." Biden, Granholm and others in the administration have been holding "very extensive" conversations with domestic oil producers, Turk said.
