U.S. President Joe Biden’s efforts to lower energy prices have reduced the nation’s emergency oil reserves, new data show.
According to the Department of Energy, inventories in the Strategic Petroleum Reserve (SPR) declined by 6.9 million barrels in the week ending on June 24. Federal government data show that 6 million barrels of sour crude and nearly 1 million barrels of sweet crude were injected into the energy market during this span.
In total, the world’s largest emergency supply of crude oil stood at 497.9 million barrels, its lowest level since April 1986.
With the U.S. consuming close to 20 million barrels per day, based on the Energy Information Administration’s (EIA) 2021 estimate, the country still maintains a 25 days supply.
At this rate, the SPR will shrink to its lowest level in 40 years by the fall, as its supply is dwindling faster than the output of some medium-sized countries that are a part of the Organization of the Petroleum Exporting Countries (OPEC), including Algeria and Angola.
The petroleum reserve was established in 1975 following the 1973–1974 oil embargo. The U.S. government wanted to prevent future supply disruptions, so it initiated the world’s largest known emergency supply, with underground tanks being located in Louisiana and Texas.
Tapping Into Stockpiles
According to the Energy Policy and Conservation Act, the president has the authority to order crude releases from the reserve if he declares “a severe energy supply interruption” that could threaten the economy or national security.
Some lawmakers have proposed restricting releases unless Congress approves legislation or a joint resolution.
The White House has been tapping into these stockpiles to help stabilize the global energy market and bring down oil prices. In November, Biden released 50 million barrels of crude from the reserves. Two months later, the administration authorized the release of more than 13 million barrels.
By Andrew Moran
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