Funds said to be blocked for crude oil purchase to fill strategic reserve

Senate Democrats apparently negotiated elimination of additional funds for the Strategic Petroleum Reserve (SPR) that were going to be included in the big coronavirus assistance package pending in the Senate Mar. 25.

A plan to buy about 77 million bbl of crude oil for the SPR was announced by the Trump administration Mar. 13, and the US Department of Energy issued a solicitation Mar. 19 to buy as much as 30 million bbl of oil in a first step for that plan (OGJ Online, Mar. 19, 2020).

But Sen. Chuck Schumer (D-N.Y.), the Senate minority leader, circulated word Mar. 25 to fellow senators saying the SPR purchase language was removed from the coronavirus bill, according to reports from Capitol Hill. He reportedly referred to the oil purchase plan as a “$3 billion bailout for big oil.”

Rep. Kevin Brady (R-Tex.) appeared to confirm the reports when he tweeted that Senate Democrats “killed $$ in economic aid bill to buy 77 million barrels of cheap oil for nation’s Strategic Petroleum Reserve.”

Republicans had been intending to fund the purchase of oil for the SPR with an appropriation in the coronavirus bill. The rationale was that oil prices have crashed and oil companies are laying off workers not only because of an expected oversupply of crude oil from Saudi Arabia and Russia but because of virus-related slumping demand for oil.