The U.S. will seek up to $20 billion to refill the Strategic Petroleum Reserve (SPR), according to Energy Secretary Chris Wright. He told Bloomberg News on Friday the reserve would be filled “just close to the top.”
We looked at President Trump’s plans to refill the SPR a few days ago in Build Me Up Buttercup. Current inventories sit just below 400 MMbbl, leaving the SPR about 320 MMbbl shy of maximum capacity. The SPR was regularly adding barrels over the last year of the Biden administration but no barrels have been added the last three weeks, according to RBN's Crude Oil Billboard. The estimated price tag for 320 MMbbl of oil at $76/bbl would come to about $24.3 billion.
We laid out four scenarios for how an SPR refill might play out:
- Current Rate Scenario (orange line in chart below): From the end of 2023 to the end of 2024, the SPR increased at about 2.5 MMb/month, or 82 Mb/d. If the Department of Energy were to continue filling the SPR at that rate, it would take more than a decade to add 320 MMbbl.
- 2X Current Rate Scenario (green line). If the DOE were to increase the rate to 5 MMb/month, the SPR could be filled by 2030, although there could be challenges in adding barrels at a faster clip.
- Accelerated Scenario (blue line): The fastest the SPR has been filled up since it was formed was 365 Mb/d in the COVID-affected month of June 2020 — during President Trump’s first term — suggesting that monthly purchases could rise to about 10 MMbbl. At that rate, refilling the SPR to capacity would take less than three years.
- Maximum Scenario (purple line): In a perfect world, with all four sites open and ready to receive oil, the maximum refill rate is about 785 Mb/d, or about 23.5 MMb/month. The SPR has room for about 320 MMbbl and at that rate could achieve it in just a little over a year. However, there are numerous questions about whether the SPR could be filled that quickly, especially given the limitations due to SPR site construction and the logistical challenges of running at maximum infill rates for an extended period of time.
The SPR, the world’s largest emergency crude oil stockpile, was established in 1975. The SPR fell to its lowest level in 40 years — 346.8 MMbbl — in July 2023, following an 180-MMbbl emergency drawdown following Russia’s invasion of Ukraine.
