U.S. to start replenishing crude reserves after sell-off

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The U.S. Department of Energy announced Friday that it will begin buying back crude to replenish its strategic reserves, which are at their lowest level since 1984 after the strategy of massive sales of barrels to try to lower the price of gasoline in the country.

The office gives until December 28 to companies wishing to participate in the buyback to submit their offers.

In total, Energy needs about 3 million barrels to be delivered in February.

In October, US President Joe Biden’s administration announced its intention to buy back the petroleum which began to sell as a strategy to mitigate the effects on the price of gasoline of the Russian invasion of Ukraine, once prices returned to between 67 and 72 dollars per barrel.

In this way, the Department of Energy will be able to buy the barrels to reinforce its strategic reserve “at a price less than the $ 96 on average for which they were sold,” the office said in a statement.

The barrels will be bought at a fixed price, so the amount that is agreed now will not change if market conditions change in February.

In March, the U.S. government announced it would sell 180 million barrels of crude from its strategic reserves to try to lower the average price of fuel, which hit a record high of more than $5 a gallon in June, spurred on by the war in Ukraine.

In October, Biden decided to sell 15 million barrels of strategic reserves (the last of the 180 million promised), after the OPEC+ alliance, led by Saudi Arabia and Russia, decided to reduce its output by 2 million barrels per day (mbd), its largest cut in oil supply since May 2020.

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Since then, prices have moderated quite a bit in the country, although some Republican representatives accused the Democrat of using strategic crude reserves for political purposes because of the proximity of the November midterm elections.

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