US rejects oil concessions

The US is currently holding back on replenishing US oil reserves due to a lack of workable concessions. So far, the U.S. government has only received concessions that are too expensive or don’t meet all the requirements. Bloomberg reports.

The US Department of Energy announced in December that it would replenish strategic petroleum reserves by buying about 3 million barrels starting next month. Insiders say some interested parties have applied for the facility, but all offers have so far been rejected.

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The plan follows President Joe Biden’s landmark decision to make 180 million barrels of oil available to the United States to offset high fuel prices following Russia’s invasion of Ukraine.

Deadline not met

The ministry is abandoning its ambition to buy 3 million barrels in February, but the plan — operating with a new approach, accepting offers with fixed prices — remains in place.

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Initially, the plan was set with a figure of US$70 per barrel in mind, but oil prices fell sharply in the fourth quarter and the US oil benchmark came back to the same level. “The ministry has a long-term plan to replenish reserves and is keen to do so with minimum inconvenience to taxpayers,” a spokesperson said. Only offers meeting all requirements will be considered. However, offers will not be accepted before February.’