The Biden administration in December will sell another tranche of oil from the national reserve to put a damper on gasoline prices, then plans to replenish the supply when prices drop to about $70 per barrel, senior administration officials said Tuesday.
On Wednesday, the Energy Department will announce a sale in December of 15 million barrels from the Strategic Petroleum Reserve, a network of storage sites in Texas and Louisiana that contains more than 400 million barrels of oil, officials said.
That sale is part of a plan announced in March to sell 180 million barrels from the reserve in response to oil price spikes triggered by the Russian invasion of Ukraine.
President Joe Biden will also chide oil companies to lower their profit margins to reduce gas prices and say that the U.S. will purchase oil to fill the reserve when the standard American benchmark, known as West Texas Intermediate, reaches a range between $67 and $72 or lower.
The announcements come two weeks after OPEC, the international oil cartel, said it would cut oil production, a maneuver that prompted Biden to publicly question the U.S. relationship with Saudi Arabia.
[OPEC production cuts add fuel to domestic energy debates]
The kingdom holds 15 percent of the world’s proven oil reserves, according to the Energy Information Administration, and carries sway in the bloc’s decision-making process.
White House officials called that decision “shortsighted,” and congressional Republicans called for more domestic oil drilling in response.
In another effort to lower gasoline prices, the EPA in April waived restrictions on the sale of ethanol-blended gasoline during the summer.
Separately, House Democrats voted in May to pass legislation that would allow the Federal Trade Commission to investigate potential price gouging within the wholesale and retail oil industries.
On a call with reporters Tuesday, administration officials pointed to sales from the reserve as a reason why gasoline prices declined since the summer.
The president on Wednesday will “call on companies to pass their savings through to consumers,” one official said.
Asked to rule out a restriction on the export of U.S.-produced oil, an official declined to do so.
Through trade groups, oil, gas and refining businesses have opposed a potential ban or limit on the export of oil or refined petroleum products.
The Energy Department will also announce a finalized rule Wednesday to allow it to enter contracts with fixed prices to replenish the reserve, said one official, who added that the administration wants more oil production in the U.S.
“Production is increasing; we want it to increase further,” the official said.
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