Biden administration launches plan to refill emergency oil reserve

The Biden administration plans to seek bids this fall to buy 60 million barrels of crude oil as the first step in a years-long process aimed at replenishing America’s emergency oil reserve, an Energy Department official said.

This would mark the first time since the early 2000s that the Energy Department has acquired large quantities of oil for the US Strategic Petroleum Reserve (SPR), the largest emergency supply of oil on the planet. The Energy Department plans to announce the launch of the long-term buyback plan to show officials they are serious about eventually refilling the SPR, which has been drained by the war in Ukraine and sales mandated by Congress to raise revenue. But that will take time.

Delivery of the first tranche of 60 million barrels will take place in unspecified future years, the Energy Department official said, adding it will be paid for with revenue received from ongoing emergency sales.

Reserves were already sitting at 20-year lows before President Joe Biden promised in late March to release a record-setting 180 million barrels of oil over six months to ease pressure on energy markets.

The latest release amounts to a loss of one-third of the oil still left in the SPR.

The first tranche of purchases will cover only one-third of that 180-million-barrel-release.

The specific timing will be determined by expected market conditions, focusing on when oil prices and demand are forecasted to be significantly lower, the official said.