The United States could accelerate the pace of buying crude to refill the Strategic Petroleum Reserve (SPR), as all four sites would be available by the end of the year after a maintenance period, U.S. Secretary of Energy Jennifer Granholm told Reuters in an interview.
"All four sites will be back up by the end of the year, so one could imagine that pace would pick up, depending on the market," Secretary Granholm said, commenting on the current pace of buying about 3 million barrels of crude for the reserve per month this year.
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.
In March, the U.S. Department of Energy expected only 40 million barrels to be refilled by the end of this year, but another 140 million barrels of crude will stay in the SPR after the cancellation of congressionally mandated sales from 2022, according to Reuters.
The Biden Administration could now accelerate the rate of repurchases of crude for the SPR as it views the global oil markets well-supplied and does not expect wild swings in prices or spikes in the "next short while," Secretary Granholm told Reuters.
Earlier this year, the energy secretary said that the Biden Administration aims to have crude in the SPR by the end of the year back up to the levels before the massive sales of 180 million barrels in the past two years.
The Administration continues to target purchases of crude for the strategic reserve at a price of $79 per barrel or below. Early on Wednesday, the WTI Crude price was at around $73 a barrel.
By Tsvetana Paraskova for Oilprice.com
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Comments
Based on a plan to return 3.0 mb monthly to the SPR, this will take 8 years to refill the SPR.
However, the SPR may never be refilled in the next 20 years or ever. The reason is that there is hardly any spare oil for sale in the market while US production is hardly able to contribute to the refilling and despite lots of talk by the US Department of Energy (DoE) about refilling the SPR, it only managed in 2023 to return 8.0 mb to the SPR.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert