Joe Biden to announce emergency oil sale to avert US price hike

US President Joe Biden will be announcing a plan to sell the final portion of his release from the country’s emergency oil reserve by the end of the year. He will also be detailing a strategy for refilling the emergency reserves when oil prices come down, officials said.

The plan will help to ensure the necessary supply to stop oil price hikes that would be hurting businesses and consumers throughout the United States. It will also be giving assurances to drillers from the country that the government will be buying oil if prices come down lower than expected.

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Joe Biden announced the sale of 180 million barrels from the Strategic Petroleum Reserve (SPR) earlier in 2022 to prevent a supply crisis. The crisis was a result of sanctions on Russia, who are one of the biggest exporters of energy in the world, following its invasion of Ukraine.

While the plan dictated the end of the SPR oil sale in November at the time, sales remained low than what was expected in the summer and currently, around 15 million barrels have not been sold. These unsold barrels will be put up for bidding for delivery in December and more oil could also become available if the need arises, an administration official told CNN.

“The president’s going to keep a careful eye on announcing today that whatever we’re doing today could continue and see additional SPR releases – if necessary,” senior US energy adviser Amos Hochstein told CNN.

“The president’s also going to be announcing that we are going to replenish the SPR,” he added.

The official later told CNBC that no immediate threat of oil collapse is looming on the horizon currently.

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As per an official, the US President will be putting a plan in motion to restock the oil in the reserves in the coming years, however, only if the prices are at or below $67 to $72 per barrel for West Texas Intermediate.

“He is calling on the private sector in the United States to do two things. One is take this signal and increase production, increase the investment, and No. 2 is to make sure that as they are taking these profits, as they are benefiting from these markets, that they are continuing to give the consumer the appropriate price,” the official stated.