The Energy Department on Tuesday announced it will buy up to 3 million barrels of oil to begin replenishing the Strategic Petroleum Reserve (SPR) after drawing out stores amid energy crunches last year.
The administration is soliciting crude oil to refill one of the SPR’s four major Gulf Coast sites: Big Hill in Texas.
“DOE is committed to executing an SPR replenishment strategy that provides the best deal for taxpayers — aiming to repurchase crude at a lower price than the average of about $95 per barrel it was sold for in 2022, while strengthening energy security by providing certainty to the industry in a way that helps encourage near-term supply,” the department said in a statement, adding that it plans to purchase more oil at an unspecified date later in the year.
Since President Biden took office in 2021, the SPR has been depleted by nearly 300 million barrels, much of that occurring after the Russian invasion of Ukraine sent gas prices skyrocketing to more than $100 a barrel.
In a bid to stabilize prices, the Biden administration announced last March it would release 1 million barrels a day over the following six months. Overall, the administration released a record high of 180 million barrels in 2022.
Later in the year, in October, the White House announced it would begin the process of buying oil to replenish the SPR once prices fell to a range of $67-$72 a barrel.
The Republican House, meanwhile, has also set its sights on the SPR releases since the beginning of the session. In January, the House passed a bill largely along party lines to restrict SPR releases, requiring the federal government to develop a comprehensive plan for new federal oil and gas leasing on federal lands to offset withdrawals.
New leases take an average of over four years to begin producing new oil.
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