Releasing 180 million Barrels from the Strategic Petroleum Reserve ("SPR") to Save a Few Cents Per Gallon
There are many ways to reduce oil and gas costs, none of which the Biden administration supports, which includes reducing the Biden regulations on oil companies; accelerating pipeline permits; encourage banks to loan to oil and gas companies; suspend the Jones Act (regarding rules for shipping between domestic ports); complete the Keystone XL Pipeline.
The scam of release from SPR is just plain stupid on multiple levels:
- Little impact on the announcement, crude prices fell 4.9% as markets respond to short-term supply and demand changes.
- The SPR after taking 180 million barrels leaves no effective cushion, only around 300 million barrels in reserve. The U.S., as a member of the International Emergency Agency, is required to hold 90 days of net import cover in reserves, which is around 300 million barrels.
- The purpose of the SPR is to have a reserve in case of an emergency, war, oil boycott but not to drop prices by 5 or 10 cents a gallon. This act is totally political designed to ease the pain from the Democrats ridiculous energy policy.
- If we are to have an SPR we need to refill it, which by the way will increase future demand and oil costs. Do you recall the Democrats in Congress refusing President Trump's request to complete the filling of SPR when oil prices were considerably lower? How is that decision looking now?