How Biden's Strategic Petroleum Reserve sale will work and what it will do
The Biden administration announced on Tuesday it would act alongside five other major economies and release tens of millions of barrels of oil from national stockpiles in a bid to lower prices, as global oil cartel OPEC+ resists significantly boosting production in response to President Joe Biden's urging.
The Department of Energy will oversee the release of up to 50 million barrels of crude oil from the Strategic Petroleum Reserve's four storage sites along the Gulf Coast, which will be made available to private firms for refining or otherwise adding to their own crude reserves.
The department will make up to 32 million barrels of crude available to refiners and other companies through its exchange capability, which is functionally a loan repaid with in-kind interest in the form of oil. Exchange oil will be returned to the reserve over the next three years.
Up to another 18 million barrels will be sold on an accelerated timeline under authorization from Congress, which in the Bipartisan Budget Act of 2018 ordered the department to sell 30 million barrels between Fiscal Years 2022 and 2025.