U.S. Oil Reserves See Turnaround After Massive 2022 Release
After a steep drop in recent years, the U.S. Strategic Petroleum Reserve (SPR) is showing signs of recovery, with stock levels steadily increasing since mid-2023. The SPR, a vital emergency crude oil supply designed to protect the country from supply shocks, now holds 387.22 million barrels as of November 1, 2024.
This rise follows a massive drawdown in 2022, when the Biden administration released 180 million barrels to alleviate high fuel prices amid global disruptions caused by Russia’s invasion of Ukraine. This release, conducted in coordination with allies, sought to inject much-needed supply into the global oil market. The Treasury Department later reported that these releases, alongside contributions from other International Energy Agency countries, helped to reduce gas prices by as much as 40 cents per gallon, providing critical relief for American consumers.
However, the unprecedented drawdown sparked concern among policymakers and energy analysts about the future security of the SPR. By early 2023, the reserve had dropped to its lowest level in four decades, fueling debate over whether this emergency resource was being depleted at the expense of long-term energy security. When President Joe Biden took office in January 2021, the SPR held 638 million barrels; by the end of the 2022 release, it was down to roughly half that amount.
In a marked shift from 2022’s emergency strategy, the Biden administration began rebuilding the SPR last year. Starting in July 2023, the reserve has seen steady increases in stock levels, thanks to targeted purchases and the cancellation of congressionally mandated sales.
Patrick De Haan, an oil industry analyst, recently highlighted this trend, noting that SPR levels have risen “every week since July 2023” and projects that this pattern will continue through spring 2025.
In November, the Department of Energy announced the completion of its “final” crude oil purchase under the current administration, with the acquisition of 2.4 million barrels. This latest purchase brings the total crude secured in 2024 to 59 million barrels, at an average price of $76 per barrel—significantly lower than the $95 per barrel at which the 2022 releases were sold.
“This milestone cements President Biden and Vice President [Kamala] Harris’s commitment to putting the economic and energy security of the American people first,” said Jennifer Granholm, the U.S. Secretary of Energy, emphasizing that securing crude at lower prices not only strengthens the SPR but also safeguards taxpayer funds.
Granholm has repeatedly underscored that the SPR remains the largest emergency oil stockpile in the world, noting that the recent rise in stock levels signals a positive shift in U.S. energy preparedness.
“The SPR is and will remain the largest of its kind globally,” she said, adding that the administration’s buyback strategy has been “a good deal for taxpayers” while restoring the reserve’s critical capacity.
Despite these gains, the Biden administration’s handling of the SPR has faced ongoing criticism, particularly from Republican lawmakers and some industry insiders who argue that draining the reserve for short-term economic relief undermined U.S. energy security. Critics, including now President-Elect Donald Trump, have vowed to prioritize an aggressive refill of the SPR. Trump recently stated that he would “immediately refill” the reserve, a promise that appeals to those concerned about the SPR’s depleted levels over the past two years.
The SPR’s current level of 387.22 million barrels, though higher than it was immediately after the 2022 drawdown, remains below historic norms. Many energy analysts see this as a precarious balance between emergency readiness and economic pragmatism, reflecting broader debates about the role of the SPR in U.S. energy policy.
Information for this briefing was found via SPGlobal and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
