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U.S. Department of Energy ditches plans to buy oil for strategic reserve

The U.S. Department of Energy said on Thursday it has ditched plans to purchase crude for the nation’s emergency reserve due to a lack of funding from Congress, dealing a blow to President Donald Trump’s plan to give relief to energy companies amid the global oil market collapse.

Energy Secretary Dan Brouillette had asked lawmakers for $3 billion to purchase up to 77 million barrels to fill the reserve, but the stimulus package passed by the Senate on Wednesday did not include the funding. The initial purchase was to be 30 million barrels.

The purchases were seen as a way to absorb some of the glut in crude markets caused by demand erosion from the coronavirus pandemic and a flood of supply from top producers.

Department of Energy spokeswoman Shaylyn Hynes said Brouillette hopes the purchase will be funded in subsequent legislation. He “calls on Congress to work with the administration to fund the President’s request as soon as possible,” she said.

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