Biden administration set to start refilling oil reserve

The Biden administration is planning to begin refilling the Strategic Petroleum Reserve, a senior administration official said Friday, marking the end to the massive supply releases that the White House ordered to tame the sharp price spikes earlier this year.

President Joe Biden had ordered the Energy Department to begin releases from the reserve last year, and he sharply ramped up those sales after Russia invaded Ukraine in February — sending crude oil prices soaring and driving up gasoline to record levels. Total releases from the reserve this year totaled more than 211 million barrels, putting the inventories at their lowest levels since 1984.

Republicans had accused Biden of misusing the SPR for political purposes, but voters backed the measures by a clear majority, and retail gasoline prices retreated sharply as crude oil markets calmed. U.S. benchmark WTI crude futures jumped nearly $2 on the announcement and were trading at $75 per barrel early Friday afternoon. That's well below the peak of over $120 a barrel earlier this year.

Average retail gasoline price stood at $3.178 per gallon, according to the American Automobile Association — down from the record high at $5.02 in June and nearly 15 cents under the year ago level.

The Energy Department will start with an initial request for 3 million barrels, asking companies for the barrels to be delivered in February, the administration official said on a call with reporters. Companies participating in the process must submit their offers by Dec. 28 and will offer oil at a fixed price.

“There's still quite a bit of volatility in the system,” the official said. “When we think the price is in the range where we think it’s a good deal for taxpayers and good for the market, we will buy. The buyback will take months, it will take years.”

The administration had announced in October it would set up a process to purchase oil from companies to refill the SPR at a price of $67 to $72 a barrel.

The department will also offer 2 million barrels for exchange to fuel producers looking to make up supply lost because of the Keystone pipeline transporting crude from Canada to refineries in the U.S. Midwest and Gulf Coast going offline after a spill last week, the official said.