rump administration prepares to buy 30M barrels of oil

The U.S. government will buy 30 million barrels of oil from producers amid a financial downturn for the industry.

The Department of Energy (DOE) announced Thursday it would conduct the sales to fill the Strategic Petroleum Reserve (SPR), fulfilling a pledge by President Trump to offer assistance to the oil industry as prices plummet with the twin threats of the coronavirus and a pricing war between Saudi Arabia and Russia.

“It is a common sense move. Everyone who has done any version of investing knows you try to buy low and sell high. The same goes with filling the SPR over time,” Energy Secretary Dan Brouillette said in a call with reporters.

This initial purchase comes as oil has fallen to about $25 per barrel, down from roughly $50 a month ago and a steep decline from the average $60 pricetag for oil already in the reserve.

The 30 million barrel purchase announced Thursday is a far cry from Trump’s Friday pledge to fill America’s emergency fuel supply “right up to the top,” maxing out at 77 million barrels.