On Wednesday, U.S. Energy Secretary Jennifer Granholm reiterated the Administration’s plans to refill the Strategic Petroleum Reserve (SPR) as soon as possible if it can be done in a way that is advantageous to taxpayers.
The largest sale ever from the SPR (180 million barrels) was ordered by President Biden last year after the Russian invasion of Ukraine caused a spike in world oil prices. The Administration had intended to refill the SPR when prices were at or below $62-$72 a barrel. However, the price of oil has not reached this level since March when OPEC + announced a surprise production cut.
Since the OPEC+ announcement, prices have been hovering around $5 dollars higher than the announced threshold. Additionally, the SPR is currently Congressionally mandated to sell 26 million barrels in fiscal year 2023 from the reserve, potentially creating an odd situation where oil is coming in and potentially going out at the same time. Secretary Granholm indicated that she did not intend to refill at the same time as sales go out, so it was unclear from her remarks when potential refilling could begin.
Marathon Petroleum Supply and Trading, Equinor Marketing and Trading, Shell Trading Company, Aramco Trading Americas, Macquarie Commodities Trading and Phillips 66 were awarded the contracts for the oil, the Department of Energy said in March. Given the level of uncertainty in the world, it troubles many that inventories in the nation’s reserves have dropped to 369.6 million barrels—down from 638 million barrels at the beginning of 2021, and the lowest amount of crude oil held in the stockpiles since November 1983.
Tim Tarpley, Energy Workforce President, analyzes federal policy for the Energy Workforce & Technology Council. Click here to subscribe to the Energy Workforce newsletter, which highlights sector-specific issues, best practices, activities and more.
