The Biden Administration announced on Friday a request for proposals for an additional 3 million barrels of crude oil scheduled for delivery in May, marking one small step closer to replenishing the country’s Strategic Petroleum Reserves (SPR).
The country’s rainy-day oil fund, the Strategic Petroleum Reserves, had 638.1 million barrels in storage at the beginning of the current administration. However, more than 44 million barrels had been sold by the end of 2021.
Strategic Petroleum Reserve Rebound: From Lows to 355 Million Barrels
A staggering 221 million barrels were sold off from the SPR in 2022. Some of these barrels were purportedly sold to alleviate the burden of high petrol prices on American drivers at the time. Which threatened to incite a wave of irate voters ahead of the midterm elections in November 2022.
Others were a part of a sales plan that was required by Congress.
The SPR had 371.6 million barrels of oil at the beginning of 2023; by July. That number had dropped to just 346.8 million barrels, or slightly over half of what it had been at the beginning of 2021 and the lowest levels since 1983.
In the event that oil prices drop to or below roughly $67–$72 per barrel. The Administration said it would eventually replenish the SPR. At the moment, WTI is trading for $72.97 per barrel.
Oil prices rose after a hijacking occurred in the Gulf of Oman involving an oil tanker.
The SPR increased by 8 million barrels over the course of the six months. That followed the 346.8 million barrel down to 355 million. Regaining the SPR to 2021 levels would take years at that rate of $750,000 per month. At $70 a barrel, it would also cost $21 billion.
Some claim that the Administration already “put back in” 147 million barrels because it canceled the previous requirement to sell 147 million barrels out of the SPR.