The Department of Energy said on Wednesday it has bought 3.25 million barrels, opens new tab of domestically-produced crude oil, its latest in a steady stream of small purchases for the reserve. The oil is slated to be delivered to the SPR in August.
Here are some facts about the SPR and efforts to put oil back in.
WHAT IS THE SPR?
It is the world's largest emergency oil stash. The U.S. created the SPR in 1975 after the Arab oil embargo spiked gasoline prices and damaged the economy. Presidents have tapped the stockpile to calm oil markets during war or when hurricanes hit oil infrastructure along the U.S. Gulf of Mexico. The oil is held in heavily-guarded underground caverns at four sites on the Texas and Louisiana coasts.
HOW MUCH SPR OIL WAS SOLD IN 2022?
In 2022, the administration announced a sale of 180 million barrels of oil over six months from the reserve, the largest ever SPR sale. The DOE also conducted a sale of 38 million barrels in 2022 that had been mandated by Congress.
HOW MUCH IS COMING BACK?
The administration has bought back about 29.61 million barrels of domestically-produced crude oil, since the 2022 sales. The DOE says it has also sped up the return of nearly 4 million barrels to the SPR from loans to oil companies.
The pace of the buybacks is being tempered by planned life extension maintenance at two of the four SPR sites, department officials have said.
Quick buybacks of much larger volumes could also risk pushing up oil and gasoline prices ahead of the Nov. 5 presidential election, analysts have said. Energy Secretary Jennifer Granholm said on Feb. 21 the U.S. was being careful not to do anything to remove supply from the market when prices might be high.
CURRENT SPR LEVEL
The reserve currently holds, opens new tab361.6 million barrels, nearly 60% of which is sour crude, or relatively high sulfur oil which many U.S. refineries are engineered to process. The most oil it ever held was nearly 727 million barrels in 2009.
The sales in 2022 sank the SPR to the lowest level in about 40 years. That angered some Republicans who accused the Democratic administration of leaving the U.S. with a thin supply buffer to respond to a future crisis.
But the administration says it has a three-pronged strategy to return oil to the reserve. That includes buying back oil, the return of oil loaned from the SPR to companies, and its work with Congress to cancel congressionally mandated sales of 140 million barrels of SPR oil through 2027. Both Democratic and Republican lawmakers had voted for those sales to pay for government programs.
The U.S., which is producing oil at record volumes with more increases expected this year, also has more crude in the SPR than it is required to as a member of the Paris-based International Energy Agency, the West's energy watchdog. Under the agreement, the U.S. is required to hold 90 days' worth of net petroleum imports.
AT WHAT PRICE DOES THE U.S. WANT TO BUY SPR OIL ?
The administration says it sold the 180 million barrels at an average of about $95 a barrel. It wants to buy back oil at $79 a barrel or less. The West Texas Intermediate oil price of about $79.72 a barrel on Wednesday could slow future purchases if it stays at that level or rises. The price rose to a four-month high on a surprise withdrawal in U.S. crude supplies and after Ukrainian attacks on Russian refineries.
