The US is withholding replenishment of US oil reserves for the time being due to a lack of viable offers. So far, the US government has only received offers that are too expensive or did not meet all the requirements. Bloomberg reports.
The US Department of Energy announced in December that it would replenish the Strategic Petroleum Reserve with the purchase of about 3 million barrels starting next month. Insiders report that some interested parties have asked for its facilitation, but that all offers so far have been rejected.
The plan follows President Joe Biden’s historic decision to make 180 million barrels of oil available to crack down on high fuel prices in the United States following the Russian invasion of Ukraine.
Deadline not respected
The ministry abandons its ambition to buy 3 million barrels in February, but the plan – which works with a new approach, accepting offers at a fixed price – remains in force.
Originally, the plan was drawn up with an oil price of $70 a barrel in mind, but in the fourth quarter, the oil price fell sharply and the US oil benchmark reached the same level. “The ministry has a long-term plan to rebuild reserves and is keen to do so in a way that causes minimal disruption to taxpayers,” a spokesman said. Only offers that meet all requirements will be considered. However, offers are no longer accepted before February.’
Source: BNR
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