US “Plans” To Buy 3 Million Barrels For SPR Days After It Drained 2.9 Million In One Week

With oil stubbornly the only asset class that is pricing in if not a depression then certainly a deep recession – even as every other asset is already pricing in the inevitable Fed easing in response to said recession – and the price of WTI tumbling as low as $63 at the start of May, the credibility behind the Biden administration’s promise to restock the recently drained SPR has become the butt of all jokes. As a reminder, last Fall the White House said the aim was to refill the reserve when prices were at or below about $67-$72 per barrel. Since then oil prices fell far below.

But that doesn’t mean the pathological liars in the presidency will stop lying about refilling the Strategic Petroleum Reserve; in fact just the opposite and just days after the DOE moved the goalposts to a June “refill“, moments ago Bloomberg reported that the US is preparing to buy up to a whopping 3 million barrels of crude oil to begin refilling its depleted Strategic Petroleum Reserve.

After selling more than 200 million barrels from the emergency stockpile last year, in part to curb high energy prices, the Energy Department plans to solicit offers to replenish the reserve, which has fallen to the lowest level since 1983.

Of course, you will forgive us if we call more bullshit from the admin that has taken lying to an artform, and which just last week drained 2.9 million barrels of oil from the SPR, long after it was supposed to have restarted refilling it.

In addition to direct purchases, the agency has said part of its strategy for refilling the reserve includes a return of oil from previous exchanges, and avoiding “unnecessary sales unrelated to supply disruptions.” The department successfully cancelled some 140 million barrels of oil sales mandated by Congress.

Last week,  Energy Secretary Jennifer Granholm said the government would repurchase crude oil for the reserve after a congressionally mandated drawdown ends in June. She also claimed that the refill the SPR as soon as maintenance work is completed… or generally just kicking the can to doing anything at all.

Case in point: an earlier attempt to refill the reserve, via another ‘gargantuan’ 3 million barrel-purchase, was canceled by the Energy Department in January, saying the offers it received were either too expensive or didn’t meet other specifications. Both explanations are the kind of pure, unadulterated bullshit one has come to expect from the most corrupt administration in US history, and explains why not only Gulf nations but US energy companies are counting the days until the senile occupant of the White House is once again voted out (only this time the fake mail in ballots won’t keep him employed).