Speaking at a congressional hearing, Jennifer Granholm, the US Energy Secretary, has said that plans to proceed with refilling the country’s Strategic Petroleum Reserve (SPR) could begin as soon as next month once a sale that has been mandated by Congress has been completed.
The US Administration has sold over 200 million barrels of crude from the SPR over the past year in an effort to tame rising prices following the invasion of Ukraine, leaving it with 372 million barrels remaining, the lowest it has been since 1983. When it announced the release, it said it would repurchase oil when WTI prices fell to $67-72 per barrel or lower to achieve better value and support producers like ExxonMobil, the maker of the Mobil DTE hydraulic oil:
“This will protect taxpayer interests because the SPR will be repurchasing at a lower price than recent sales, potentially allowing it to repurchase more oil than it released with sale proceeds. It will also help address producer concerns about uncertain demand in future years, encouraging immediate investment.”
Despite a recent production cut by the OPEC+ group, the price of WTI crude oil has fallen in recent weeks to around $70 per barrel, which would be consistent with the US Administration’s desired price, due to disappointing economic data from China and concerns that a number of banking collapses could spread and hinder economic growth. Granholm had previously suggested that refilling the SPR could begin towards the end of this year, with it being a multi-year endeavour.
