U.S. Energy Secretary Jennifer Granholm announced plans to return the Strategic Petroleum Reserve (SPR) to pre-sale levels by the end of the year, following the unprecedented sale of 180 million barrels two years ago. The replenishment initiative comes in the wake of President Biden’s administration’s decision to release oil from the reserve to mitigate rising gasoline prices triggered by Russia’s invasion of Ukraine.
Despite expectations to refill only 40 million barrels by year-end post the 180 million sale, an additional 140 million barrels originally slated for extraction from 2024 to 2027 will be retained in the SPR due to the discontinuation of congressionally mandated sales in 2022. The exact stock levels expected in the reserve by year-end remain undisclosed.
Currently holding approximately 362 million barrels, the SPR’s inventory had totaled 565 million barrels before the monumental sale in March 2022. Granholm hinted at potential cancellations of other mandated sales, emphasizing the congressional priority of refilling the SPR and hinting at forthcoming discussions on the matter.
Granholm also mentioned that completion of maintenance at a storage site within the SPR will enable increased oil purchases, aiding in the replenishment process. Energy officials are closely monitoring the surge in U.S. oil prices and its implications for restocking the reserve, with a target to repurchase oil below $79 per barrel, while current U.S. crude futures are trading above $82.
Additionally, Granholm addressed the Biden administration’s temporary pause on liquefied natural gas (LNG) permitting, assuring that it will not have a prolonged impact and is solely for evaluation purposes. She dismissed concerns regarding a potential surge in coal purchases in Asia due to the LNG pause, underscoring its temporary nature and limited global repercussions.