The United States has taken steps to replenish its Strategic Petroleum Reserve (SPR) by purchasing six million barrels of crude oil amid low global oil prices.
Control Soaring Fuel Prices
The SPR, the world’s largest emergency oil stockpile, was established in 1975 following the 1973 oil crisis to protect the U.S. economy from major supply disruptions. The Department of Energy (DOE) recently announced the new purchases as part of ongoing efforts to bolster the reserve after a historic release in 2022.
During the height of the energy crisis caused by Russia’s invasion of Ukraine, President Joe Biden authorized the release of 180 million barrels from the SPR in an effort to control soaring fuel prices, according to El Economista.
This was the largest withdrawal in the reserve’s history, and refilling the SPR has been a priority as crude prices have recently dropped below $70 per barrel.
Transaction Over $411 million.
The recent purchase includes 3.5 million barrels from Exxon Mobil, 2 million barrels from Shell Trading Company, and 500,000 barrels from Macquarie Commodities Trading US. The total cost of this transaction was over $411 million.
Deliveries of the crude oil are scheduled from February to May 2025, with the oil being stored at the Bayou Choctaw facility in Louisiana.
The SPR is vital to U.S. energy security and is stored in underground salt caverns located along the Gulf of Mexico in Texas and Louisiana.
In times of crisis, the reserve can be used to stabilize the market, as was done during the Gulf War in 1991 and after Hurricane Katrina in 2005.
While the DOE currently has enough funding to purchase an additional two million barrels at $75 per barrel, further refilling of the SPR will require congressional approval.
The DOE may also seek to cancel upcoming congressionally mandated sales of oil from the reserve to continue strengthening the U.S.’s strategic energy supply.
