The Biden administration could release additional volumes of crude oil and fuel oil this winter in the event of a supply shortage, CNBC reported, citing four unnamed sources.
Earlier this year, the administration said it would release 180 million barrels of crude from the Strategic Petroleum Reserve in a bid to rein in rising oil prices, sparking criticism that it would compromise energy security in order to reduce the price of gasoline.
As a result of the drawdown, the SPR has shrunk by more than 204 million barrels since the start of the year and it may not start to recover any time soon, since the White House has reiterated its intention to start buying oil from it. oil when prices fall. at $70 a barrel.
Meanwhile, a fuel shortage is looming. The Wall Street Journal reported last month that fuel oil prices in the northeastern United States – a region that relies heavily on fuel for winter heating – could end up being 45% higher this winter than the US. last winter.
The reason for the price hike was that soaring gas prices led many utilities in different parts of the world to switch to other fuels, including fuel oil, as an alternative. And that led to a drop in fuel oil inventories.
The United States currently has only one million barrels of fuel oil in storage, CNBC noted in its report, saying the White House could ask Congress to double the limit on those stocks and fund new storage sites. from which the administration could draw. periods of shortage.
“While improving, fuel inventories held by industry are still below average and the administration continues to engage with industry urging them to increase fuel inventories,” the official said. Department of Energy to CNBC. “The administration continues to work with lawmakers and industry to identify all options that can help American consumers.”
By Irina Slav for Oilprice.com
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