US replenishes strategic oil reserve after tapping it for Russia's invasion of Ukraine

US replenishes strategic oil reserve after tapping it for Russia's invasion of Ukraine
by Allen Cone
Washington DC (UPI) Jul 29, 2024

The U.S. Energy Department says it has replenished the 180 million barrels of oil withdrawn from the nation's Strategic Petroleum Reserve amid high gas prices after Russia's invasion of Ukraine two years ago,

This includes 140 million barrels of oil secured by working with Congress to cancel previously mandated planned sales, the agency said.

DOE, taking advantage of windows of market stability, purchased 43.25 million barrels of oil for an average price of $77.

The average barrel sales price in 2022 was $95. The lower price meets the "administration's commitment to secure a good deal for taxpayers," according to a news release.

Also, the agency accelerated nearly 5.5 million barrels in exchange for returns initially slated for the summer of 2024 to maximize refill.

On Monday, DOE announced that contracts have been awarded to two companies for 4.65 million barrels of U.S.-produced crude oil.

"From the beginning, this administration has put the economic and energy security of the American people first," U.S. Secretary of Energy Jennifer Granholm said. "This milestone is a proof point that when the Biden-Harris administration makes and implements a plan, we deliver for the American people.

"We accomplished this while getting a good deal for taxpayers and maintaining the readiness of the world's largest Strategic Petroleum Reserve."

The four U.S. underground storage sites have a capacity of 714 million barrels, enough to fill more than 1.3 billion large sedans. The program was created in 1975 after supplies were interrupted during the 1973-1974 oil embargo.

As of Friday, there are 375.1 million barrels in the reserve, including 143.4 million sweet and 231.7 million sour, as the respective types of crude oil are called.

The crude oil will be delivered to the Bayou Choctaw SPR storage site, about 12 miles southwest of Baton Rouge, La., from Oct. 1 to Dec. 31.

Bayou Choctaw SPR, which has a storage capacity of 76 million barrels, is one of four storage sites. The others are Big Hill in Jefferson County, Texas, about 26 miles of southwest of Beaumont; Bryan Mound in Brazoria County, Texas, about 3 miles southwest of Freeport; and West Hackberry in Cameron Parish, La., about 25 miles southwest of Lake Charles.

Oil is distributed to nearly half of U.S. oil refineries via interstate pipelines and barges.

Gas prices rose to a record $5.016 per gallon on June 1, 2022, according to the American Automobile Association

The current average price for regular gasoline is $3.505, according to AAA. One year ago it was $3.746.