Bush administration to halt storage of oil

WASHINGTON — The Bush administration, bowing to intense political pressure, said Friday it would cancel oil shipments into the Strategic Petroleum Reserve starting in July.

The move comes two days after Congress voted overwhelmingly to suspend filling the reserve. The surprise announcement came not from the White House but from the Department of Energy, on the same day that President Bush, traveling in Saudi Arabia, was rebuffed in his call for the kingdom to pump more petroleum in hopes of lowering today's high oil prices.

The Senate voted for the measure 97-1 Wednesday, and the House followed suit by a 385-25 margin — far more support than Congress would need to overturn a Bush veto.

The government has been filling the reserve, in underground salt caverns along the Texas and Louisiana coastlines, at a rate of about 70,000 barrels a day. The 727-million-barrel reserve at full capacity now has about 703 million barrels. The reserve was created in 1975 to provide insurance against supply disruptions, such as when the Organization of Petroleum Exporting Countries imposed an embargo on exports in 1973-74.

The Energy Information Administration, the statistical arm of the Energy Department, has said a halt to filling the reserve could reduce gasoline prices by 3 cents to 5 cents per gallon.

Megan Barnett, a spokeswoman for the Department of Energy, described the halt to filling the reserve as a 180-day pause that will be re-evaluated next year. Since taking office, Bush has increased the reserve from 540 million barrels to 703 million, enough to offset 58 days of lost oil imports should there be a supply disruption.