The Biden Administration has been successful in bringing down prices at the pump by releasing crude from its SPR, but this strategy has already proven to be unsustainable in the light of lower OPEC+ production
The Strategic Petroleum Reserve’s oil is sold competitively when the President of the United States of America finds, pursuant to the conditions set forth in the Energy Policy and Conservation Act , that a sale is required. In the past, oil resources were withdrawn from the SPR to meet domestic oil requirements – such as Emergency Drawdowns, Non-Emergency Sales, SPR Modernization Sales, and Mandated Sales.
aftermath of COVID-19. The supply chain issues, stimulus over an extended period, and low-interest rates have helped to reinvigorate the U.S. economy, but have led to a prolonged period of high inflation. Economic stimulus and rising oil and gas prices have further aggravated domestic inflation causing hardship to domestic consumers.
Surely, it will take many years or decades to refill the SPR to roughly 700 million barrels. The speed of replenishment depends on many factors. However, the biggest factors are oil prices and the development of domestic inflation. Excessive withdrawals could be risky, as Russia could intentionally prolong the conflict with Ukraine. This strategy provides more leverage to OPEC to manipulate oil production to push oil prices even higher.
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