The Biden administration has declared the completion of its Strategic Petroleum Reserve (SPR) replenishment after selling a record amount of oil in 2022 to counter soaring fuel prices. This move marks a significant milestone in the administration’s efforts to manage energy security in the wake of the global energy crisis triggered by Russia’s invasion of Ukraine.
The Department of Energy announced the purchase of 2.4 million barrels of oil for the SPR, with deliveries scheduled from April to May to the Bryan Mound, Texas site. This acquisition brings the total amount of oil repurchased since the 2022 sale to 59 million barrels. However, the department’s purchasing fund has been exhausted by this latest purchase.
The 2022 sale of 180 million barrels of crude generated nearly $17 billion in emergency revenue, which was intended for buybacks. However, Congress intervened and reallocated approximately $2.05 billion to address the national deficit. The Biden administration managed to repurchase oil at an average price of less than $76 a barrel, significantly lower than the $95 a barrel it sold in 2022. This resulted in a profit of about $3.5 billion for the DOE.
US Secretary of Energy Jennifer Granholm emphasized the administration’s commitment to prioritizing the economic and energy security of the American people. She highlighted the success of the SPR in stabilizing fuel prices, providing certainty to the energy industry, and maintaining the reserve as the world’s largest emergency crude oil supply.
The Biden administration also collaborated with Congress to cancel congressionally mandated sales of 140 million barrels of SPR oil scheduled for 2027. This decision, supported by both Democrats and Republicans, removed a potential strain on the reserve.
The record 2022 sale of 180 million barrels over six months, the largest ever from the SPR, played a crucial role in mitigating the surge in US gasoline prices, which reached record highs exceeding $5 a gallon in June 2022. However, this drawdown reduced SPR levels to their lowest point in 40 years, dipping below 350 million barrels. This sparked criticism from some lawmakers who argued it compromised the U.S. energy security buffer.
The SPR currently holds nearly 390 million barrels, significantly less than its peak of nearly 727 million barrels in 2009. Despite the drawdown, the US has emerged as the world’s largest oil and gas producer, thanks to advancements in fracking and horizontal drilling techniques. This achievement makes the US more energy secure than it was in the mid-1970s when Washington created the SPR, the world’s largest emergency oil stash, in response to supply shocks such as the Arab oil embargo.
