The SPR was unchanged last week at 351 MMbbl, but that will change by the end of the year. Last week, the DOE announced that it would conduct monthly solicitations to purchase oil for the SPR from now until at least May 2024. The first solicitation is for up to 6 MMbbl for delivery in December 2023 and January 2024 (3 MMbbl each month). This is similar to the purchase programs we saw in August and September. The DOE aims to purchase oil at a price of $79/bbl or below, which is lower than the average price it received for emergency SPR sales in 2022. The DOE has already purchased 4.8 MMbbl for the SPR replenishment at an average price of less than $73/bbl. The administration's replenishment strategy includes direct purchases, exchange returns, and securing legislative solutions to avoid unnecessary sales. The cancellation of 140 MMbbl in congressionally mandated sales scheduled for Fiscal Years 2024 through 2027 has also contributed to progress in the SPR replenishment.
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DOE Purchasing Another 3 MMbbl in Jan 24
Running Up That Hill - Three-Pronged Plan to Refill SPR Comes With Challenges Beyond Price
The Biden administration has been on a mission for more than a year to restock the Strategic Petroleum Reserve (SPR), which was tapped at unprecedented levels in an effort to keep crude oil and refined product prices under control after Russia’s invasion of Ukraine in early 2022 disrupted energy flows globally. But if returning all of the released 180 MMbbl and replenishing the SPR to pre-war levels was the plan, they’ve got a long way to go. In today’s RBN blog, we examine the steps the administration has taken to replenish the reserve and the headwinds it faces.
Build Me Up Buttercup - Logistical Challenges, Price Tag Complicate Trump's Goal of Refilling SPR
Strategic Petroleum Reserve (SPR) inventories have been climbing for more than a year, but they could go much higher if President Trump has his way, as one of his major campaign promises was to refill the SPR “to the very top,” a goal he has repeated since his return to the Oval Office. Current inventories sit just below 400 MMbbl, leaving the SPR about 320 MMbbl shy of maximum capacity. But the refilling process may not be as straightforward as one might think, as three of the four SPR storage sites have experienced construction upgrades in the last year — which means things could go slower than anticipated. In today’s RBN blog, we’ll discuss the challenges of filling up the SPR and detail four scenarios for how the process might play out.
