Biden Administration to Buy Another 6 Million Barrels of Oil for Strategic Reserve

The Strategic Petroleum Reserve storage at the Bryan Mound site in Freeport, Texas, on Oct. 19, 2022. (Brandon Bell/Getty Images)

The Biden administration announced Friday that it is buying an additional 6 million barrels of oil for the nation’s petroleum reserve as it looks to replenish depleted stocks as prices dip.

The Department of Energy (DOE) said on June 7 that it is ready to receive bids for two new solicitations—one for 1.5 million barrels for September delivery and the other for 4.5 million for October, November, and December—to refill the Strategic Petroleum Reserve (SPR) that was in recent years drained to historic lows.

The deliveries will be made to SPR’s Bayou Choctaw site, which is located roughly 12 miles southwest of Baton Rouge, Louisiana.

“This action is another step in DOE’s strategy to make consistent solicitations when oil prices are favorable for taxpayers,” the agency said in a statement, adding that it’s aiming for purchases at $79 per barrel or less.

In 2022, the Biden administration announced the sale of 180 million barrels of oil over six months from the reserve in a bid to lower gasoline prices. The average price received for the SPR sales that year was around $95 a barrel. The U.S. Treasury Department estimated that the 180 million barrel sale cut gas prices by up to 40 cents per gallon.

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The record SPR sale in 2022 was met with mixed reactions. Some praised it as a bold step to help tackle soaring inflation, while others—chiefly Republicans—accused President Joe Biden of tapping the reserve for political benefit ahead of the 2022 midterm elections and not because of an emergency.

Later, in October 2022, President Biden announced a plan to refill the depleted stockpile in the upcoming years. He said his aim was to replenish oil reserve stocks when U.S. crude was around $70 a barrel. In the months after Russia’s invasion of Ukraine in February 2022, uncertainty in oil supplies helped push crude prices to around $120 a barrel.

At the time of reporting, U.S. crude was trading at around $75 a barrel, while international benchmark Brent crude was around $79 per barrel.

“DOE will continue to evaluate options to refill the SPR while securing a good deal for taxpayers, taking into account planned exchange returns and market developments,” the agency said in a statement.

The highest-ever SPR stockpile totaled 726.6 million barrels in 2009. Following the announced sales commitments in 2022 that continued into the following year, the SPR reached a multi-decade low of 347.2 million barrels in June 2023, per data from the U.S. Energy Information Administration (EIA). At the beginning of 2022, the reserve held around 588 million barrels.

The federally owned oil reserves are stored in underground salt caverns at four sites in Texas and Louisiana.

SPR Sales Ban

Amid national security concerns about depleting the SPR, a bipartisan Senate initiative in March sought to harden the ban on selling crude from the reserve to China and other foreign adversaries.

The issue of SPR sales to Chinese firms heated up when President Biden announced the historic sales in 2022, which included selling 1 million barrels to UNIPEC America, a Houston-based arm of China’s Sinopec.

A U.S. funding bill signed by President Biden in March 2024 blocked Chinese companies from buying oil from the stockpile, but it contained an exception if the crude was not exported to China.

A bill introduced by Sens. Joni Ernst (R-Iowa) and John Fetterman (D-Pa.) seeks to ban SPR sales to China, Russia, Iran, Venezuela, Syria, and Cuba. It also aims to ban such sales to any entity owned, controlled, or influenced by the Chinese Communist Party (CCP).

“Energy security is national security, which is why it is essential to safeguard our strategic supply of oil from benefitting our enemies,” Ms. Ernst said in a statement.

“This bipartisan bill will ensure America’s Strategic Petroleum Reserve does not fall into the hands of those trying to harm us and ensure CCP-controlled businesses are not making money by stockpiling taxpayer-subsidized oil. We cannot put Americans last when our adversaries are seeking any opportunity to gain a foothold over us,” she said.

Mr. Fetterman called for a need to prioritize national security when considering SPR sales.

“Our Strategic Petroleum Reserve is meant to protect the energy security of America and our allies,” Mr. Fetterman said in a statement.

“Our adversaries should not be able to purchase oil from our SPR—that’s just commonsense. We must prioritize our national security. This is a good bill that has overwhelming bipartisan support in both chambers.”

The bill, called the Banning Oil Exports to Foreign Adversaries Act, was introduced in the Senate on March 21, read twice, and referred to the Committee on Energy and Natural Resources.