US DoE says it won’t sell strategic oil reserves
Oil prices bounce back after Energy Department clarification
A spokesperson for the US Department of Energy (DoE) stated on Thursday that the United States has no plans to tap the country’s Strategic Petroleum Reserve (SPR) “at this time”.
The statement came after comments made by US Energy Secretary Jennifer Granholm on Wednesday hinted at the measure.
Speaking at the Financial Times’ Energy Transition Strategies Summit, Granholm stated: “It’s a tool that’s under consideration”.
When asked about a possible return of the ban on crude-oil exports, which was lifted in 2015, the Canada-born former Governor of Michigan said: “That’s a tool that we have not used, but it is a tool as well.”
The comments were made in light of rising fuel costs, which, although a global phenomenon in 2021, has threatened the popularity of the Biden administration domestically.
Attempts to arrest runaway energy prices
The US president’s attempts to lower prices by exhorting the Organization of the Petroleum Exporting Countries (OPEC) to increase output have thus far met resistance.
Should the US government opt to tap the SPR, it would constitute the fourth such time the measure has been resorted to. The last time the SPR was released took place in 2011, when the Obama administration sold 30 million barrels of crude oil after a civil war in Libya disrupted global supply chains.
Last month, the US’s largest trading partner, China, sold oil from its strategic reserves on the market for the first time on record in an attempt to arrest runaway energy prices. The DoE's clarification quickly reversed the downward momentum triggered by Secretary Granholm’s comments.
Having fallen below $75.22 per barrel on Thursday morning, West Texas Intermediate Crude futures traded up 0.7% by 16:20 (BST) at $77.96 per barrel.
Brent crude spot traded up 1% at $81.62 per barrel, having dipped to $79.55 per barrel.