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Just days after she suggested refilling the strategic petroleum reserve could take years, Energy Secretary Jennifer Granholm has said that buying for the SPR could begin this year.
"We will begin that process this year but to refill the full amount is impossible to do in one year," Granholm said, as quoted by Reuters, noting that two storage sites for the SPR were undergoing maintenance, which has constrained their capacity.
Granholm then added that the process of buying back oil would depend on the price of oil and the return of more than 25 million barrels of oil from previous exchanges with oil companies.
When the Biden administration sold off 221 million barrels of crude oil from the SPR last year, the idea was to buy oil to replace what was withdrawn.
In October of last year, the administration announced that it would repurchase crude oil for the reserve when prices were at or below about $67-$72 per barrel. The move would be dual purpose in that not only would it replenish the nation’s depleted reserves, but it would boost demand when prices were low instead of sending them into orbit at a time of regular prices.
Currently, the strategic petroleum reserve is at the lowest level since 1983, at 372 million barrels of crude, which has prompted some observers to warn about a possible compromise in the country’s energy security.
Yet the administration has indicated it was in no rush to get refilling. President Biden’s Special Presidential Coordinator for Global Infrastructure and Energy Security, Amos Hochstein said as much earlier this month.
“We’ve seen a decline in oil prices, we’re seeing some crunch there,” Hochstein told Bloomberg TV in an interview.
“We should take a deep breath and wait and see how this crisis right now impacts the oil and gas industry, production and what the profile is. So far prices have come down. We’re watching it very closely, we’ll continue to watch it over the next several days,” the official also said.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.