Biden’s Latest Oil Move Adds to His Energy Contradictions
Buying crude to refill the Strategic Petroleum Reserve when prices drop below $80 a barrel is part of a strategy that can be summed up as “drill, baby, don’t drill.”
President Joe Biden’s energy policies are a series of contradictions.
Photographer: Mandel Ngan/AFP via Getty Images
The phrase oil market should always come with a “*”. Oil’s history is a succession of long periods where some actor sought to control prices, punctuated by occasional periods of free-for-all (usually coincided with crashes). Standard Oil, the Seven Sisters, the Texas Railroad Commission and OPEC were would-be cartels. Today, we have OPEC+, wherein Saudi Arabia seeks to nudge prices this way or that (but usually up) using spare capacity and Russia, with slightly less finesse, invades neighbors and threatens cutoffs.
And we also have Uncle Sam. Bloomberg News reports that the Biden administration is considering buying crude to refill the Strategic Petroleum Reserve when prices drop below $80 a barrel (Nymex near month futures are just under $90 right now). This is not a complete surprise. Almost 140 million barrels, or 24%, have been drained from the SPR since March, when the International Energy Agency agreed an emergency release in response to Russia’s attack on Ukraine. Meanwhile, the Department of Energy has proposed modifying its procedures for refilling the SPR, including the use of fixed price contracts for future delivery.