The U.S. Department of Energy has sped up the return of 4 million barrels of oil to the Strategic Petroleum Reserve, from a previous exchange of crude to energy companies, as it seeks to replenish the stockpile after a record drawdown last year, it said on Friday.
Oil companies will now return the 4 million barrels to the reserve by February instead of this summer, it said. The Energy Department said it aims to buy up to an additional 3 million barrels of oil by February for the reserve.
The administration of President Joe Biden last year conducted the largest sale ever from the SPR of 180 million barrels in an effort to fight rising oil prices after Russia’s invasion of Ukraine in February 2022.
Since the beginning of 2023, the department said it has now bought back nearly 9 million barrels at an average price of $75 a barrel, about $20 lower than the $95 average price for last year’s emergency sales. The return from the exchange means more than 12 million barrels will have been bought or returned through February, it said.
The administration has a three-pronged strategy to help replenish the reserve that involves buying back oil, returning oil from previous exchanges, and working late last year to cancel congressionally mandated sales from the SPR of 140 million barrels from late 2023 through 2027.
“The Administration’s ongoing three-part replenishment strategy to get the best deal for taxpayers while increasing SPR stocks is working,” said Secretary Jennifer Granholm.
Last year’s 180-million-barrel-sale sank levels in the reserve to the lowest in 40 years, angering some Republicans who accused the administration of leaving the U.S. with a thin supply buffer to adequately respond to a future supply crisis. But Republicans in recent years had called for big sales from the reserve as domestic U.S. oil output has soared thanks to fracking and other drilling techniques.
