The Biden administration announced plans on Monday to buy 3 million barrels of crude oil, marking the start of a years-long process aimed at replenishing America’s depleted emergency oil stockpile.
The Energy Department is soliciting offers of crude oil to refill Big Hill, one of the four major oil storage facilities along the Gulf Coast that make up the Strategic Petroleum Reserve.
However, the 3 million barrels will make up just a sliver of the vast amounts of oil released from the SPR in recent years.
Faced with spiking gas prices, President Joe Biden has aggressively drained the SPR, the world’s largest supply of emergency crude oil.
The SPR held about 638 million barrels of oil when Biden took office in January 2021, according to the US Energy Information Administration. Today, it is down to 362 million barrels — the lowest level since October 1983.
A year ago, the Biden administration announced it would seek bids to buy tens of millions of barrels of crude oil, marking the first time since the early 2000s that the federal government is moving to buy large quantities of oil for the SPR.
The unprecedented amounts of oil released under Biden have helped lower gas prices, but they have also shrank the government’s rainy day fund for future potential emergencies, including hurricanes, wars and other disasters.
The Energy Department said the purchase of 3 million barrels of oil is part of an effort to replenish reserves at a “good deal” for taxpayers, noting that today’s prices are well below the average of about $95 from 2022.
After spiking well above $100 a barrel following Russia’s invasion of Ukraine, oil prices have fallen sharply amid recession fears, the Federal Reserve’s interest rate hikes and better-than-feared supply from Russia and the United States. Oil prices are currently trading around $71 a barrel.
The administration has previously said it will start to repurchase oil for the SPR when prices are at or below about $67 to $72 a barrel.
Before announcing plans to purchase oil, the Energy Department moved to cancel 140 million barrels in congressionally mandated sales scheduled for the next several fiscal years.