The Biden administration is purchasing 3 million barrels of oil to begin emergency oil replenishment

New York (CNN) On Monday, the Biden administration announced plans to purchase 3 million barrels of crude oil, marking the start of a years-long process aimed at replenishing America’s depleted emergency oil stocks.

The Energy Department is soliciting offers of crude oil to refill Big Hill, one of four major oil storage facilities along the Gulf Coast that make up the Strategic Petroleum Reserve.

However, 3 million barrels would only make up a small piece of Huge amounts of oil released from the Strategic Petroleum Reserve In the last years.

In the face of soaring gas prices, President Joe Biden has aggressively depleted the Strategic Petroleum Reserve, the world’s largest emergency crude oil source.

The Strategic Petroleum Reserve held about 638 million barrels of oil when Biden took office in January 2021, according to the US Energy Information Administration. Today, it is down to 362 million barrels – the lowest level since October 1983.

A year ago, the Biden administration announce It will seek bids for tens of millions of barrels of crude oil, the first time since the early 2000s that the federal government has moved to buy large volumes of oil for the Strategic Petroleum Reserve.

The unprecedented amounts of oil released during the Biden era Helped lower gas pricesbut they also slashed the government’s rainy-day fund for possible future emergencies, including hurricanes, wars, and other disasters.

The Energy Department said the purchase of 3 million barrels of oil is part of an effort to replenish reserves with a “good deal” for taxpayers, noting that today’s prices are well below the average of about $95 from 2022.

After surging above $100 a barrel in the wake of Russia’s invasion of Ukraine, oil prices have fallen sharply amid fears of an economic recession, the Federal Reserve raising interest rates, and better supply fears from Russia and the United States. Oil prices are currently trading around $71 per barrel.

Management has previously said You will start buying back oil against the Strategic Petroleum Reserve when prices are at or below $67 to $72 per barrel.

Before announcing plans to buy oil, the Energy Department moved to cancel 140 million barrels of congressional-sanctioned sales scheduled for the next several fiscal years.