Fuels

Biden Authorizes Emergency Sale From Strategic Petroleum Reserve

BP, Shell, ExxonMobil exiting Russian oil, energy ventures over Ukraine attack
president joe biden
Photograph courtesy of the White House

WASHINGTON In a move that will affect retail gas prices, President Joe Biden has authorized the U.S. Department of Energy (DOE) to release crude oil from the nation’s Strategic Petroleum Reserve (SPR) to address significant market and supply disruptions related to Russia’s invasion of Ukraine. The DOE’s Office of Fossil Energy and Carbon Management (FECM) plans to issue a notice of sale for a 30-million-barrel sale on March 2.

The notice is part of a coordinated action with the member countries of the International Energy Agency (IEA) to collectively release an initial 60 million barrels of oil from strategic petroleum reserves, reflecting a common focus and willingness to address significant market and supply disruptions related to Russia’s war on Ukraine.

“Russia’s actions in Ukraine have resulted in energy supply shortages of significant scope and duration and have already caused a substantial increase in oil prices worldwide that threatens to slow United States economic growth at this critical point in our economic recovery,” President Biden said in a memorandum of finding.

Along with the releases from global SPRs, “We stand prepared to take additional measures if conditions warrant,” U.S. Secretary of Energy Jennifer Granholm said. “We will continue advancing ongoing efforts to accelerate Europe’s diversification of energy supplies away from Russia and to secure the world from Putin’s attempts to weaponize energy supplies.”

She added, “The United States believes that investing in clean energy is the best way to reduce domestic and international dependence on Russian oil and gas. Clean energy technologies are available and cost-effective today and offer the surest path towards a world where energy supply cannot be used as a means of political coercion or a threat to national security, and where families and businesses are protected from volatile prices and markets.”

Meanwhile, major oil companies are severing ties with Russia, which also will affect energy prices.

London-based BP said it will exit its shareholding in Russian oil company Rosneft. BP will no longer report reserves, production or profit for Rosneft, it said. At the end of 2021 these totaled approximately $11 billion, according to the company. Also, BP CEO Bernard Looney and former BP group chief executive Bob Dudley have resigned from the Rosneft board, effective immediately.

And the board of London-based Shell has announced its intention to exit its joint ventures with Russian energy companies Gazprom, Salym Petroleum Development and Gydan. Shell also intends to end its involvement in the Nord Stream 2 natural gas pipeline project. At the end of 2021, Shell had approximately $3 billion in assets in these ventures in Russia, it said.

Also, ExxonMobil, which operates a project on behalf of an international consortium of Japanese, Indian and Russian companies, said, “In response to recent events, we are beginning the process to discontinue operations and developing steps to exit the Sakhalin-1 venture.

Given the current situation, ExxonMobil will not invest in new developments in Russia, the Irving, Texas-based company said. 

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