The Biden administration could adjust the timing of its planned release of strategic crude oil stockpiles if global energy prices drop substantially, U.S. Deputy Energy Secretary David Turk told Reuters on Wednesday.
Turk, speaking in a video interview for the Reuters Next conference, added that other consumer nations that had agreed to release strategic reserves in concert with the United States to tame prices could also adjust their timing, if needed.
“I think each country will make decisions based on what’s useful and good for their consumers and based on where the price is,” he said.
Turk added that the administration is also considering the merits of a proposal by some lawmakers to ban crude oil exports to keep domestic consumer fuel prices in check, and that the decision would ultimately rest with President Joe Biden.
A spokesperson for the Department of Energy said after the interview that the department has no current plans to alter the timing or the size of the stockpile releases.
The Biden administration had announced last month it would release 50 million barrels from the SPR, with deliveries beginning as soon as January. The move would come alongside smaller releases from China, India, Japan, South Korea and Britain, to help lower consumer energy costs.
The unusual agreement among oil-consuming nations to coordinate stockpile releases was designed to tame soaring energy prices after the OPEC producer group and its allies rebuffed repeated requests from Washington to pump more quickly to match rising demand as the world began to exit the pandemic.
Oil prices have since declined, however, amid worries that the new Omicron variant of the coronavirus will spread and trigger extensive lockdowns, reducing global energy demand.
After Turk’s comments, U.S. oil prices settled down 61 cents at $65.57 a barrel.
“The president gave us flexibility,” Turk, one of several administration officials who meet regularly to discuss energy security, said about the U.S. planned release of strategic stockpiles.
“So if the price of oil goes down significantly, if the pain at the pump that is currently being experienced by consumers around our country, and around the world as well, dissipates for whatever reason, then we use the tools differently,” he said.
“The metric of success for any policy from our end related to these issues is ‘what is the price at the pump’? … not whether we get 50 million barrels out as quickly as we possibly can,” he said.
The Energy Department said on the day of Biden’s reserve announcement that companies could borrow 32 million barrels of oil from the SPR and that contracts for the exchanges would be awarded on Dec. 14 or before.
Deliveries of the oil would take place from January to April and oil companies would have to return the oil, with interest, from next year through 2024.
The department would also offer 18 million barrels of oil for a sale that had been previously approved by Congress. The sale notice would be posted on Dec. 17 or before, it said.
Turk said the White House was still studying proposals from some of Biden’s fellow Democratic lawmakers to ban crude oil exports to keep prices down, saying it remained among the range of tools the administration could eventually use.
Some critics of a ban have said it would risk depressing prices for domestically produced crude, while doing little to cool motor fuel prices, as many of the country’s refineries are tooled to run on foreign oil.
“We’ve certainly heard from members of Congress who feel both ways on this issue,” he said. “And so we’re putting together all that analysis, all that information to inform decision making by our secretary and ultimately by the president.”