The US will sell more oil in the wake of the OPEC+ cut

() — President Joe Biden will announce Wednesday the sale of an additional 15 million barrels from the Strategic Petroleum Reserve in December, a senior administration official said. This is an attempt to counter market pressures created by OPEC+’s decision to cut oil production targets to just three weeks from now. the midterm elections in the United States.

The sale announcement is the latest step in the White House’s plan to balance global markets and curb rising gasoline prices. It marks an extension of the six-month program that was designed to provide a bridge for domestic producers to increase their own production as the global market faces spasms in the wake of the Russian invasion of Ukraine.

“The price of gasoline is still too high and we need to keep working to bring it down,” Biden said at an event in Los Angeles last week, adding that he planned to announce new measures in the coming days.

The planned action would comply with the administration’s March announcement to release a historic 180 million barrels from the US Strategic Petroleum Reserve (SPR) over a six-month period to counter increase in energy prices caused by the Russian invasion of Ukraine. That action, which has been implemented for regular sales in recent months, has added to global economic concerns to drive down gasoline prices for nearly three months in a row.

Biden has also made it clear to his advisers that if conditions warrant, he is prepared to authorize further sales in order to balance the market. The president, the official said, directed his energy and economy teams to be prepared to authorize “significant additional sales in the coming months” if global market conditions warrant.

The president will also detail on Wednesday the administration’s plan to replenish the emergency stockpile, which is now at its lowest level in nearly 40 years, setting an important marker for market participants given the scale of the action. federal in the course of the last six months.

Biden will announce that his administration intends to buy back crude oil for the emergency reserve when prices are between $67 and $72 a barrel, or even lower.

“We think it is an important signal to producers that the SPR helps to moderate and stabilize price flows, not only when prices rise but also when they fall,” the official said.

The government will also end a rule that allows the US government to sign fixed-price contracts with suppliers through a competitive bidding process, which will make future crude buybacks easier.

The plan is also meant to counter criticism of the unprecedented scale of Biden’s stockpile releases. According to officials, this shows the government’s intention to buy back when market conditions make it more advantageous.

“This government is very committed, and we are going to reiterate this commitment with the reinstatement of the SPR,” said the official. “We view the SPR as an incredibly important national security asset and we want to ensure that it serves its purpose well into the future.”

The official noted that the reserve, which has approximately 400 million barrels, remains the largest in the world and that the US remains prepared to face any crisis or challenge that requires its use.

“It is important to understand and underline that 400 million barrels is a lot of barrels,” the official said.

US officials strategically reduced the size of the sales as the six-month program approached its deadline, in a bid to ease the market transition until the OPEC+ decision, which drew a furious pushback in the US. and an intense effort by the government to think of alternatives that counter any increase in gas prices.

That included additional sales from the reserve, as officials closely watched Biden’s ability to trigger new sales within the initial program limits as Election Day approaches.

‘s Paul LeBlanc contributed to this report.