By Jarrett Renshaw, Timothy Gardner and Laura Sanicola
WASHINGTON (Reuters) - The Biden administration plans to sell more oil from the U.S. Strategic Petroleum Reserve in a bid to dampen fuel prices before next month's congressional elections, according to three sources familiar with the matter.
The administration is also expected to release further details on timing for refilling the stockpile, reflecting its desire to combat rising pump prices while also supporting domestic drillers with future demand for their oil, they said.
Elements of the plan could be unveiled as early as Wednesday when President Joe Biden will make a public statement about energy prices. White House chief of staff Ron Klain said on Twitter on Tuesday that Biden would address gasoline prices on Wednesday, but did not provide details.
The White House and Department of Energy did not respond to requests for comment.
Biden has in the past lambasted the oil industry for high energy prices, saying they are reaping bumper profits at a time when Americans are struggling with inflation. His administration has also said it is studying more drastic options to lower consumer prices, such as limiting fuel exports, something sources said he is likely to repeat in his Wednesday speech.
Rising retail gasoline prices have helped boost inflation to the highest in decades, posing a risk to Biden and his fellow Democrats ahead of the Nov. 8 midterm elections, in which they are seeking to keep control of Congress.
The administration's plan for the SPR would likely include marketing the remaining 14 million barrels from the administration's previously announced record sale from the reserve of 180 million barrels that started in May.
The Energy Department still has about 14 million barrels of SPR oil left to sell from that release because selling was slowed in July and August by holidays and hot weather.
The administration has also spoken with oil companies about selling an additional 26 million barrels from a congressionally mandated sale in fiscal year 2023, a fourth source said. Fiscal year 2023 began Oct. 1.
"The administration has a small window ahead of midterms to try to lower fuel prices, or at least demonstrate that they are trying," said a source familiar with the White House deliberations. "The White House did not like $4 a gallon gas and it has signaled that it will take action to prevent that again."
Average U.S. gasoline prices hit about $3.89 a gallon on Monday, up about 20 cents from a month ago and 56 cents higher than last year at this time, according to the AAA motor group. Gasoline prices hit a record average above $5.00 in June.
David Turk, Biden's deputy energy secretary, said last week the administration can tap the SPR in coming weeks and months as necessary to stabilize oil.
The administration has also spoken with energy companies about buying back oil through 2025 to replenish the SPR, the sources said, in a sign it wants to ensure drillers keep pumping.
In May, the DOE said it would launch bids late this year for a buy-back of about one third of the 180 million barrel sale. It suggested then that deliveries would be linked to lower oil prices and lower demand, likely after fiscal year 2023, which ends Sept. 30 next year. Two sources said the buy-backs could continue through 2025.
Biden officials in recent months also urged oil refiners including Exxon Mobil (NYSE:XOM), Chevron (NYSE:CVX) and Valero to not increase exports of fuel and warned them it could take action if plants do not build inventories.
The administration has not taken a potential ban of gasoline and diesel exports off the table although opponents of such a move say it could exacerbate Europe's energy crisis and raise fuel prices at home.