Biden administration cancels buyback of 3 million barrels to replenish oil stockpile

The Biden administration has canceled two planned oil purchases aimed at replenishing the Strategic Petroleum Reserve (SPR), the Department of Energy confirmed Wednesday.

The planned purchases would have secured 3 million barrels later this year, part of a broader goal to fully replenish the SPR by year’s end. The Energy Department announced the planned buys, set to be delivered to a Louisiana facility, in March.

“Keeping the taxpayer’s interest at the forefront, we will not award for the Bayou Choctaw SPR site in August and September, and will continue to solicit available capacity as market conditions allow,” an Energy Department spokesperson told The Hill. “As always, we monitor market dynamics to remain nimble and innovative in our successful replenishment approach to protect this critical national security asset.”

The Biden administration withdrew about 50 million barrels from the SPR in November 2021 in hopes of stabilizing gas prices. The following spring, in response to energy shocks from the Russian invasion of Ukraine, the administration announced the largest-ever withdrawals from the stockpile, including a daily release of 1 million barrels for 180 days.

The administration vowed at the time to replenish the SPR based on market conditions, with a goal of buying back oil while prices are $79 per barrel or less.

However, oil was around $81 per barrel at the time of the last buyback in March, when the U.S. bought back nearly 3 million barrels. The U.S. benchmark West Texas Intermediate has seen a recent surge, surpassing $85 for the first time in six months earlier this week.

The Department of Energy has bought back about 32.3 million barrels for the SPR overall since last year. The stockpile, which held some 600 million barrels before the beginning of the Ukraine invasion, remains just more than half full, containing about 363 million barrels as of April.  

Rachel Frazin contributed.