Since 2021, the White House has depleted 43 percent of America’s emergency crude stockpiles. The Biden administration has paused refilling the Strategic Petroleum Reserve (SPR) to prioritize taxpayer interests in the face of surging crude oil prices due to global market tensions. Despite initial plans to procure three million barrels of oil for storage in Louisiana, the government has now postponed the decision, citing market dynamics. It remains uncertain if the Department of Energy will resume filling the SPR in October.
President Biden’s administration has drawn down emergency oil supplies by 43 percent since February 2021, reducing the inventory to just over 363 million barrels. Following Russia’s invasion of Ukraine, which sparked a surge in oil and gas prices, the administration has sought to replenish the SPR as international energy markets stabilize. In October 2022, the White House announced plans to repurchase crude oil at lower prices to protect taxpayer interests and encourage investment in the energy sector.
Energy Secretary Jennifer Granholm has outlined a strategy to restock the SPR, emphasizing its importance as an energy security tool. Despite a brief period of decline in SPR inventory, the Energy Department has gradually increased reserves by approximately 17 million barrels after hitting a low in July 2023. The administration’s efforts to replenish the SPR have faced challenges, including political opposition during the pandemic.
Meanwhile, total U.S. commercial crude inventories have improved, standing below the five-year average. Market analysts suggest that accelerating crude purchases for SPR replenishment could drive up oil prices, which have already risen significantly in 2024 due to geopolitical tensions and global market tightness. There are concerns about a global oil supply deficit and record-high demand exceeding production levels, potentially impacting inventories.
Crude oil prices are expected to exceed $90 per barrel, while gasoline prices could reach $4 per gallon in the coming months.
