Biden Administration Completes Final Oil Purchase for Emergency Reserve as Funds Run Out

The Biden administration announced on Friday that it has made its last purchase of oil for the Strategic Petroleum Reserve (SPR). This follows the record sale of oil from the reserve in 2022, which was done to combat the rise in fuel prices after Russia’s invasion of Ukraine.
The Department of Energy stated that it bought 2.4 million barrels of oil for the reserve, with delivery scheduled from April through May to the SPR’s Bryan Mound site in Texas.
It was also revealed that this purchase has exhausted the department’s fund for buying back more oil for the reserve. The 2022 sale of 180 million barrels of crude generated nearly $17 billion in emergency revenue for buybacks. However, Congress rescinded about $2.05 billion to assist in offsetting the national deficit.
After the 2022 sale, the Biden administration has bought back 59 million barrels at an average price of less than $76 a barrel, which is significantly lower than the $95 a barrel at which it sold oil in 2022. The Department of Energy reported that this resulted in a profit of about $3.5 billion.
U.S. Secretary of Energy Jennifer Granholm emphasized that this effort solidifies the administration’s “commitment of putting the economic and energy security of the American people first by taking actions that stabilized prices at the pump, provided certainty to industry, and maintained the SPR as the world’s largest supply of emergency crude oil.”
The Biden administration also collaborated with Congress to cancel the congressionally-mandated sales of 140 million barrels of SPR oil through 2027, which had been voted for by both Democratic and Republican lawmakers.
With the change in administration, President-elect Donald Trump, a Republican, will need to work with Congress to replenish the department’s purchasing fund. Trump has indicated that he would add oil to the SPR.
The 2022 sale of 180 million barrels over six months was the largest ever from the SPR. It played a role in countering the spike in U.S. gasoline prices that reached record highs of more than $5 a gallon in June 2022.
This sale also caused the SPR levels to drop to the lowest in 40 years, falling below 350 million barrels, which led to criticism from some lawmakers who argued that it undermined the U.S. energy security buffer. Currently, the SPR has nearly 390 million barrels. The highest amount of oil it ever held was nearly 727 million barrels in 2007.
Despite these fluctuations, the U.S. is now the world’s largest oil and gas producer, thanks to techniques like fracking and horizontal drilling. It is more energy secure than it was in the mid-1970s when the SPR, the world’s largest emergency oil stash, was created following supply shocks such as the Arab oil embargo.