Trump orders Energy Department to ‘fill up’ Strategic Petroleum Reserve with cheap oil

Source: By Abby Smith, Washington Examiner • Posted: Monday, March 16, 2020

The Department of Energy will purchase “large quantities of crude oil” to restock the U.S. Strategic Petroleum Reserve in an assist to the oil industry suffering from recent dramatic price drops and market instability, President Trump said Friday.

“We’re going to fill it right up to the top, saving the American taxpayer billions and billions of dollars, helping our oil industry and making us even further toward that wonderful goal, which we achieved, which nobody thought was possible, of energy independence,” Trump said during remarks Friday in the Rose Garden outlining the White House’s response to the coronavirus. Trump also declared the coronavirus a national emergency.

His directive to the Energy Department comes just days after the agency suspended a planned sale from the Strategic Petroleum Reserve due to the volatility of the oil markets.

The oil industry has been suffering from a collapse in prices amid a price war between Saudi Arabia and Russia. The price drops come as oil demand has also taken a hit during the coronavirus’s spread.

Since Trump’s announcement, oil prices have risen about $2 per barrel.

Independent oil producers were quick to praise the president’s move.

“American independents are the drivers of the U.S. energy revolution, and we are ground zero for the current economic crisis,” said Anne Bradbury, CEO of the American Exploration and Production Council, in a statement. She said the Energy Department’s purchase “can help alleviate the oversupply disruptions in the marketplace.”

The independent oil industry group, along with other big oil industry trade groups such as the American Petroleum Institute, have repeatedly said they didn’t want the White House to bail out producers, instead urging the administration to pull other policy levers, such as diplomacy, to help stabilize prices.

Trump, in his remarks Friday, appeared to take a different position on low oil prices than he had previously. Earlier in the week, Trump had linked low oil prices to low gasoline prices, saying it was good for the consumer.

On Friday, Trump said the crude oil purchase would put the United States in a position “that’s very strong and we’re buying it at the right price.”

“The price of oil went down quite a bit, so we’re going to fill it up,” he added. “It’s a good time to fill it up.”