Biden administration drained strategic oil reserves to save ‘world economy’: White House advisers

The Biden administration has claimed it drained the badly depleted US Strategic Petroleum Reserve (SPR) to save the “world economy.”

White House adviser on international energy affairs Amos Hochstein told CNBC’s “Squawk Box” host Joe Kernen on Dec. 5, “I’ve had — as have others, my colleagues — meetings with CEOs and other oil industry executives in the United States States … We were told that it would take time to ramp up production, it would take six months, seven months to ramp up production and get to market.

“They thought that was the end of the year,” he said.

President Joe Biden approved the release of up to 180 million barrels of oil from the SPR in March to stem soaring gas prices after Russia invaded Ukraine.

Biden has repeatedly blamed rising gas prices on Russian President Vladimir Putin and American oil companies, which have pushed up their prices. This is despite the government’s own anti-fossil fuel policy to deny investment funds to the industry, which has been a factor in falling domestic production and supplies of oil and gas – which has also pushed up prices.

The government later released another 10 million barrels from the SPR in October just before the midterms, bringing oil reserves to their lowest level since 1984, according to Forbes.

The SPR fell from 640 million barrels to less than 450 million barrels by early October.

Host Kernen said the Biden administration has consistently accused oil companies of cutting prices ahead of the midterm elections, but dropped its allegations after gas prices fell in recent weeks.

“So if oil companies and refiners have been able to control prices and rip and profit at the higher levels, why is the Biden administration getting credit when market forces take over and they collapse?” he asked.

He then asked if the Democrats are “just saying this stuff to their base”?

“We acted with the SPR to save not only the US economy but the world economy from the responses that Putin was trying to do, he literally used energy as a weapon against the West, and we’ve softened that and given time for the.” private sector to invest more and invest in America to increase production,” Hochstein said.

America’s oil reserves at critically low levels

Critics have slammed Biden for the move, calling it a cynical move to bring voters to the Democrats, which taxpayers would have to pay to replenish.

“Selling 240 million barrels directly into a short-term policy outcome without taking a single policy action to increase long-term supply should be viewed as gross negligence. Stockpiles of distillates (diesel and jet fuel) are at DANGEROUS levels,” said Kyle Bass, environmentalist and CIO Hayman Capital Management, in a tweet.

However, when former President Donald Trump proposed in March 2020 to pad the SPR to help the oil industry after it suffered a massive loss during the pandemic, Senate Majority Leader Chuck Schumer called it a bailout for “Big oil”.

Republicans in Congress had proposed spending $3 billion to top up the reserve during the pandemic while it was still cheap.

“There’s always enough money for Republicans to bail out their corporate donors, but not enough to help working Americans and state and local governments,” Schumer said at the time.

The Department of Energy said in October that it plans to buy oil to refill the SPR for between $67 and $72 a barrel, almost three times what it was at $24.49 a barrel when Trump proposed a refill lay.

“If President Biden and Congressional Democrats are genuinely concerned about gas prices crushing American families, they should end their assault on domestic energy producers and pursue policies that expand production of affordable and reliable energy, rather than plundering America’s emergency reserves on the problem hide,” the Senate Republican Politics Committee said in August.

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Bryan S. Jung is a New York native and resident with a background in politics and the legal industry. He graduated from Binghamton University.