US buys 3 million barrels to fill emergency oil reserves

U.S. Energy Secretary Jennifer Granholm told lawmakers last weekend that her department would soon begin buying oil for reserves, following a record selloff at prices last year that pushed inventories to their lowest level since 1983.

According to the announcement, the new purchase will be for sour crude oil delivered to SPR’s site in Big Hill, Texas.

Last year, the Biden administration made a massive sale of 180 million barrels from the SPR as part of a strategy to stabilize soaring oil markets and combat high prices at the pump following Russia’s invasion of Ukraine.

The sale angered Republicans, who accused the administration of leaving the U.S. with oil reserves too thin to adequately respond to a future supply crisis.

The sale reduced SPR inventories to about 372 million barrels, the lowest level since 1983, representing less than 20 days of coverage at current U.S. consumption rates.

The administration has said it will begin buying back oil from reserves to benefit taxpayers when prices remain at $67 to $72 a barrel, well below the amount sold.

US crude oil prices were at $71 per barrel on Monday.

Last month, Ms. Granholm said the purchases will take place later this year, following maintenance on two of the reservation’s four sites on the Texas and Louisiana coasts.