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U.S. Aims to Restock Strategic Oil Reserves by Year-End

The Biden Administration aims to have crude in the Strategic Petroleum Reserve (SPR) back up to the levels before the massive sales of 180 million barrels in the past two years, U.S. Energy Secretary Jennifer Granholm said at the CERAWeek energy conference in Houston.

The U.S. saw the stockpiles of crude oil in the SPR fall from 638 million barrels at President Joe Biden’s inauguration to just 347 million barrels by the summer of 2023 as the Administration tried to bring down gasoline prices for consumers. The large sell-off in the country’s safety supply of crude oil was met with criticism. Also met with criticism has been the Administration’s slow response to falling oil prices—a perfect opportunity for any Administration earnestly looking to replenish SPR oil inventories.

The U.S. Department of Energy expects only 40 million barrels to be refilled by the end of this year, but the other 140 million barrels of crude will stay in the SPR after a cancellation of congressionally mandated sales from 2022, according to Reuters. 

Currently, the SPR has around 362 million barrels of crude, compared to 565 million barrels in March 2022, when the Administration first announced the massive 180-million-barrel sale to curb the soaring gasoline prices after the Russian invasion of Ukraine.

The U.S. Administration is looking to buy 3 million barrels of oil for delivery to the SPR, the U.S. Department of Energy said last week, announcing a solicitation for the purchases. 

The Administration will be looking to buy 1.5 million barrels of sour crude oil for delivery to Bayou Choctaw, Louisiana, in August 2024. Bayou Choctaw is wrapping up maintenance. 

The Administration continues to target purchases of crude for the strategic reserve at a price of $79 per barrel or below.

Early on Tuesday, the price of the U.S. benchmark, WTI Crude, was over $82 per barrel, at $82.70.

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By Tsvetana Paraskova for Oilprice.com

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  • Jason Welker on March 19 2024 said:
    Russias invasion of Ukraine had zero to do with gas prices here in the US. Joe Bidens policies are solely responsible for the rise of crude. The draining of the reserves was political for Democrats and another reason Joe Biden should be impeached. Also OPEC+ has zero respect for Joe Biden and continues to keep millions of barrels a day off the market.
  • Mamdouh Salameh on March 19 2024 said:
    The Biden Administration will never ever be able to refill the SPR to its previous level of 638 million barrels (mb) unless it taps its oil stocks. The reason is a tightening global oil market and lack of free oil for sale.

    The US Department of Energy (DoE) managed to return only 8.0 mb to the SPR in 2023 out of 291 mb or 2.75% the Biden Administration withdrew in 2.5 years between January 2021 and December 2023.The SPR stands currently at 356 mb or 55.8% of its original level of 638 mb.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert.

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