The Federal Energy Department has had plans to replenish the national reserve for quite some time now. Since last year, when President Biden dipped into the oil reserve to keep gas prices at bay across the country, they have been working toward restocking the reserve. There were plans in effect to purchase 6 million barrels; however, those were canceled this week. There has been a price hike for oil, raising the average cost to more than $80 a barrel, something far outside of the budget.
President Biden turned to using the federal reserve of oil while we were suffering from oil shortages due to the production cuts by the Organization of Petroleum Exporting Countries. We were also hit by a ban on Russian oil at the same time due to their invasion of Ukraine, so we had significant shortages and faced expensive prices at the gas pumps.
The Department of Energy has released a statement stating they still plan to restock the reserve but will not make any purchases until the price point is not so high that the taxpayers greatly suffer.
The official name of the emergency reserve is the Strategic Petroleum Reserve.
After Biden’s use of the reserve, the stockpile was at its lowest point since the 1980s. It reached a point of being at about half its full capacity. The full capacity is about 700 million barrels, meaning the reserve reached about 350 million barrels.
One of the few Presidential powers that can be done entirely on his own accord is tapping into the reserve in order to stabilize the economy, which is what Biden had done when he made the decision. Since he did that, the Energy Department has been slowly working toward restocking the reserve. Earlier this year they purchased 6.3 million barrels.
While the Department did not officially release the price the barrels they were set to purchase were ringing in at, experts confidently feel it was above $80 a barrel. West Texas Intermediate crude oil was selling its barrels at $81.85 on August 2nd. They tend to be a benchmark for the prices, so likely others were coming in around the same price point.
The national average for a gallon of gas has increased once again, but it is still significantly lower than it was last year. The Department of Energy currently does not have an end date in which they intend to have restocked the reserve.