Biden Administration Plugs Away At Refilling Oil Stockpiles

The Biden Administration took one more baby step towards refilling the nation’s Strategic Petroleum Reserves (SPR), announcing on Friday a request for proposal for another 3 million barrels of crude oil for May delivery.

The Strategic Petroleum Reserve started out at the onset of the current administration’s term with 638.1 million barrels in storage—the nation’s rainy day oil fund. But by the end of 2021, more than 44 million barrels had been sold off. In 2022, a whopping 221 million barrels had been sold off from the SPR, some of which was sold ostensibly to mitigate high gasoline prices that were at the time squeezing U.S. drivers—a situation that threatened to create a swath of angry voters ahead of the November 2022 mid-term elections. Others were part of a Congressionally mandated sales plan.

The SPR started out 2023 with 371.6 million barrels of oil in the SPR, falling to just 346.8 million barrels in July—just over half of what it was at the beginning of 2021 and the lowest levels since 1983. The Administration said it would eventually refill the SPR should oil prices fall at or below about $67-$72 per barrel. WTI is currently trading at $72.97 per barrel.

In the six months following the 346.8 million barrel low, the SPR has rebounded to 355 million—an increase of 8 million barrels across the six months. At that rate—750,000 per month, it would take years to get the SPR back up to 2021 levels. It would also cost $21 billion at $70 per barrel.

The Administration did cancel 147 million barrels that were previously mandated to be sold out of the SPR, so some argue that 147 million barrels has already been “put back in”.