US suspends plans to buy oil after funding is stripped off coronavirus package

An oil pump in Texas in the US. (File photo: Reuters)

The US Department of Energy will suspend its plans to replenish the nation’s Strategic Petroleum Reserve (SPR) after the final version of the Senate’s coronavirus stimulus package left out $3 billion in funding for the project which was included in an earlier draft.

The funding for SPR was eliminated from the final version of the package after Democrats resisted saying it was an expensive bailout for the oil industry.

The Energy Department had announced last week that it would purchase 77 million barrels of American-made crude oil to fill SRP at a time when prices are low. WTI Crude is currently at just over $23 a barrel, down from a high of $63.27 in January.

President Trump first outlined his intention to fill the SPR earlier this month.

“President Trump’s directive to buy oil at a competitive price for the SPR is a common sense move benefiting taxpayers and supporting our nation’s economic and national security interest,” Department of Energy spokesperson Shaylyn Hynes said.

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However, the Department of Energy is still hoping for some kind of deal. “Small to medium size American energy companies and their employees should be provided the same relief being provided to other parts of our economy, and the Secretary calls on Congress to work with the Administration to fund the President’s request as soon as possible,” Hynes said in a statement.

“The American energy sector is a major driver of our nation’s economy and it is being significantly harmed by the impacts of COVID-19 and international market manipulation,” he added.

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Last Update: 19:30 KSA 22:30 - GMT 19:30
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