Although the Biden administration’s plan to delay the release of 15 million barrels of oil from the nation’s Strategic Petroleum Reserve was announced just a day ago, the reaction from the oil patch could have been written weeks, if not months, ago.
When President Biden signed the Inflation Reduction Act in August, the American Petroleum Institute (API) criticized the legislation: “[I]t falls well short of addressing America’s long-term energy needs and further discourages needed investment in oil and gas.”
Following Wednesday’s announcement, the API said, “The administration should instead focus on addressing the fundamental economic and security challenges we face by spurring more investment in American energy, infrastructure and markets that enable U.S. consumers to benefit from America’s reliable energy resources.”
Among Republican politicians, the move was viewed as a political ploy. Republican members of the House Energy and Commerce Committee tweeted:
POTUS is DRAINING the SPR at an unprecedented rate with NO PLAN to refill it – all to cover up the consequences of his rush-to-green agenda. pic.twitter.com/m8rKi4BHXP
— Energy & Commerce GOP (@HouseCommerce) October 18, 2022
Back in April, when Biden announced the release of 180 million barrels from the SPR, energy industry analyst Rory Johnston commented in his Commodity Context substack:
A combination of spot selling and future refilling (if committed today) could flatten the curve and enhance the price signal received by US shale and other non-OPEC producers, but it remains to be seen if the Biden Admin is planning or even positioned to pull it off.
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