U.S. Started Refilling Its Depleted Strategic Petroleum Reserve (SPR)
Satyesh Bhandari
The world's largest Strategic Petroleum Reserve (SPR) to supply crude oil?in emergency was established by US government primarily to reduce the impact of disruptions in supplies of petroleum products and to carry out obligations of the United States under the international energy program.
US SPR has been started refilling since dec 2023 due to lower oil prices and the Biden administration's efforts to stabilize prices after Russia's invasion of Ukraine.?However, there are physical limits to the SPR's refilling process, due to the limitation the pace at which it can be refilled.?
The total capacity of the SPR in US is about 714 million barrels.
The Strategic Petroleum Reserve currently holds about 363 MMbbl, according to Energy Department data. The reserve held nearly 600 MMbbl at the start of 2020. The SPR's oil levels have significantly dropped after the release of 180 million barrels in response to high gasoline prices.?Legislation already in place could cause the amount of oil in the reserve to fall to 238 million barrels by 2028, which would be a 67% reduction to the oil in the reservoir since 2010.?
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In 2022, the Biden administration ordered the release from the emergency oil supply in the face of surging retail gasoline costs. Now, even as pump prices are back on the rise, the DOE has committed to refill the cache, with the enormous storage caverns still half empty.
SPR has been started refilling since dec 2023 due to lower oil prices and the Biden administration's efforts to stabilize prices after Russia's invasion of Ukraine.?However, there are physical limits to the SPR's refilling process, due to the limitation the pace at which it can be refilled.?
The total amount of oil the U.S. has purchased for the inventories since last year is about 32.3 MMbbl. The Energy Department has paid an average price of under $77 per bbl, below the average price of $95 it sold for in 2022.?The DOE is buying oil at lower prices than it was sold at, and expects to purchase oil in August 2024.?