(Adds details on U.S. rejection of buying back oil for reserve,
current oil price, buyback deliveries not expected until after
September)
By Timothy Gardner
Feb 13 (Reuters) - The Biden administration said on
Monday it is selling 26 million barrels of crude oil from the
Strategic Petroleum Reserve, a release that had been mandated by
Congress in previous years.
The U.S. Department of Energy had considered cancelling the
fiscal year 2023 sale of the 26 million barrels after the Biden
administration last year sold a record 180 million barrels from
the reserve. But such a cancellation would have required
Congress to act.
Monday's announced sale will likely temporarily push the
reserve below its current level of about 372 million barrels,
its lowest level since 1983.
The DOE said bids on the oil are due on Feb. 28 and that the
oil would be delivered from April 1 to June 30.
The administration sold the 180 million barrels of oil to
combat fuel prices that had risen on Russia's war on Ukraine and
as global consumers emerged from the COVID-19 pandemic.
The department said it is implementing a three-part strategy
to refill the reserve in the long term, including repurchases
with revenues from emergency sales, returns of more than 25
million barrels of oil from previous exchanges, and working with
Congress to avoid "unnecessary sales unrelated to supply
disruptions to strategically maintain volume.
Last month the department rejected the first batch of bids
from oil companies to sell back up to 3 million barrels to the
reserve, saying it would only accept bids for oil meeting
required specifications at a price that was a "good deal" for
taxpayers. The administration had been seeking to repurchase oil
for the stockpile at about $70 a barrel.
But U.S. crude prices have risen to about $80 a
barrel on concerns about Western sanctions on Russia for its war
on Ukraine and after Moscow said it was cutting production in
March by about 500,000 barrels per day, or about 5%.
U.S. sources
have said
delivery of the first batch of oil back to the SPR after
the record sale would likely begin not until after the 2023
fiscal year, which ends after September.
The DOE said it expects that companies will return 3.1
million barrels of oil to the SPR this fiscal year and 22
million barrels in fiscal year 2024 from exchanges, or short
term loans of oil conducted to help deal with supply concerns in
the wake of hurricanes.
Last year, Congress canceled sales of about 140 million
barrels from the SPR that had been set to take place from fiscal
year 2024 to fiscal year 2027, after a DOE proposal to stop
them.
(Reporting by Timothy Gardner; Editing by Lisa Shumaker and
Marguerita Choy)
@timogard); Reuters Messaging:
timothy.gardner.thomsonreuters.com@reuters.net))
