The US could begin to refill its Strategic Petroleum Reserve as soon at the third quarter of 2023 — if the price is right, the US official responsible for energy diplomacy said.
(Bloomberg) — The US could begin to refill its Strategic Petroleum Reserve as soon at the third quarter of 2023 — if the price is right, the US official responsible for energy diplomacy said.
“I think as we get into the early fall, if prices are in the right place, we are still 100% committed to replenishing the SPR over a period of time,” said Amos Hochstein, the special presidential coordinator for global infrastructure and energy security.
But Hochstein cautioned that the timeline would depend on a number of factors — including maintenance on the infrastructure while the reserve is half empty, and how well the Biden administration can manage a congressionally mandated sale of 26 million barrels by June 30.
“We cannot release and purchase, repurchase at the same time,” he said in remarks to the Bloomberg New Economy Gateway Europe event in Dublin.
The US has said it wants to sell at a price target of $70 a barrel. West Texas Intermediate was selling for about $77 on Thursday.
“We sold the oil at well above $90 a barrel on average. If we can buy back at $70 a barrel that is both prudent, good management of the SPR itself, and a good deal for the American people financially,” he said.
Hochstein’s comments came as the US tries to navigate global energy markets upended by Russia’s invasion of Ukraine.
That’s put President Joe Biden’s goals of transitioning to more clean energy sources in at odds with the need to build more fossil fuel infrastructure — both for production and distribution — to replace Europe’s demand for energy.
“We’re going to have to do more on the infrastructure. But we have a challenge here,” Hochstein said. “We’re still in the middle of an energy transition that we’re trying to accelerate. So what do you build now to sustain you in the short and medium term, and what do you do to make sure that you’re not building something that will be, you know, wasted assets later on down the road?”
Hochstein told Bloomberg Television’s Maria Tadeo that sanctions against Russia — including a $60-a-barrel cap on Russian oil — are working to deprive Russian President Vladimir Putin of an important revenue source to sustain his war in Ukraine.
“We’ve seen a shift of Russian supplies from west to east, and that’s OK. So yes, India and China are buying a lot of oil, but with a significant discount,” he said.
That $60 cap, instituted with the support of the European Union and Group of Seven nations, is negotiable, he said.
But Hochstein declined to discuss specific prices. “There’s a fine line between facilitating the sale but ensuring it’s significantly discounted,” he said. “For now, the price cap is in the right place.”
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