The Biden administration is considering another release of oil from the Strategic Petroleum Reserve (SPR) to help stabilize global energy markets that, if carried out, could be bigger than the sale of 30 million barrels earlier this month, a U.S. source said on March 25.
“We’re in a real disruption at the moment, so you have to come at it from that perspective,” said the source, who emphasized that no decision has been made on a potential release.
“We’re not there yet, but definitely we are talking” about a release, the source said.
Global stockpiles are at their lowest since 2014, and already-rising oil prices have continued to climb following sanctions on Russian energy exports in response to the invasion of Ukraine. Analysts have said the market remained vulnerable to any supply shock.
U.S. officials are weighing factors including how much oil Russia is getting to global markets, the extent of an outage on the Caspian Consortium Pipeline, which delivers about 1% of the world’s oil, and a missile attack on an oil storage facility in Saudi Arabia, a strike claimed by the Iran-aligned Houthi movement.
Bloomberg was first to report that any new release from the U.S. SPR could be bigger than the previous sale.
By March 27, 28 or 29 it should become more clear whether another release is needed, the source said.
The U.S. has been in discussions with fellow members of the International Energy Agency (IEA) about doing another combined release of oil as Russia’s invasion of Ukraine has sent oil prices soaring.
Prices for international Brent crude were trading above $119/bbl on March 25, after the attacks in Saudi Arabia, on track for an 11% jump for the week.
U.S. Energy Secretary Jennifer Granholm on March 24 said the United States and its allies were discussing the possibility of a coordinated release of oil from storage to calm markets.
IEA member states agreed to release over 60 million barrels of oil reserves earlier this month, with 30 million barrels coming from the U.S. SPR, in a bid to cool prices which have spurred inflation.
U.S. crude supplies in the SPR fell by 4.2 million barrels last week to 571.3 million barrels, the lowest since May 2002, the Energy Information Administration said. Still, the U.S. has much more oil in the reserve than is required as a member of the IEA.
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