US Government Completes $14 Billion Purchase to Replenish Strategic Petroleum Reserve

Strategic Petroleum Reserve Replenished Following Emergency Release

The US Department of Energy (DOE) has purchased 200 million barrels of crude oil to replenish the Strategic Petroleum Reserve (SPR). The DOE secured the oil at an average price of $74.75 per barrel, marking a significant step in restoring the nation’s emergency oil reserves. This purchase follows the 2022 emergency release of 180 million barrels, which was aimed at stabilizing global energy markets after Russia’s invasion of Ukraine.

As part of its replenishment strategy, the DOE awarded contracts for 2.4 million barrels, worth $178.65 million. Energy Transfer Crude Marketing received 600,000 barrels, while Macquarie Commodities Trading US was awarded 1.8 million barrels. The DOE expects deliveries to complete by May 2025 at the SPR’s Bryan Mound site in Texas.

A Three-Part Strategy to Restore the SPR

The DOE’s buyback program builds on the 2022 emergency sale, which generated $16.95 billion in revenue. Notably, the government used $2.05 billion of this amount for deficit reduction, while the remaining funds will help repurchase oil.

To further strengthen the reserve, the DOE’s three-part replenishment strategy includes:

• Direct crude oil purchases, securing 59 million barrels at an average price below $76 per barrel.

• Retaining 140 million barrels by canceling scheduled sales between fiscal years 2024 and 2026.

• Engaging in oil exchanges with added premiums to optimize the replenishment process.

Thanks to these efforts, the DOE has successfully restored nearly 200 million barrels to the SPR.

Strengthening US Energy Security

US Secretary of Energy Jennifer Granholm emphasized the significance of the SPR’s restoration. She stated, “With these contracts, DOE has fully utilized all allocated funding for crude oil purchases, securing 20 million additional barrels at a favorable price for taxpayers.” Granholm highlighted that the SPR plays a crucial role as the world’s largest emergency oil reserve. It not only stabilizes energy markets but also safeguards national security.

The SPR, with storage facilities in Texas and Louisiana, continues to be a vital tool for mitigating oil supply disruptions. Consequently, this replenishment underscores the Biden-Harris Administration’s commitment to ensuring energy security and price stability.

Market Impact and Future Stability

The US Treasury reported that the 2022 SPR releases, combined with global coordination, helped lower US gasoline prices by up to 40 cents per gallon. Additionally, the DOE has accelerated the return of 5 million barrels through exchange agreements, further optimizing future replenishment opportunities.

By strategically balancing direct purchases, oil exchanges, and legislative adjustments, the DOE has successfully restored the SPR’s capacity. This ensures greater resilience against potential future disruptions in global oil supply.