Key facts
- The U.S. Strategic Petroleum Reserve (SPR) was created after the 1973-74 oil embargo to counter supply disruptions.
- The SPR's current inventory is 413 million barrels, significantly below its peak of 726.6 million barrels in 2009 and its capacity of 714 million barrels.
- The Biden Administration announced a release of 172 million barrels from the SPR.
- This release is a coordinated effort with International Energy Agency members who are collectively releasing about 400 million barrels.
- The SPR can be used to counter a 'severe energy supply interruption' as defined by the Energy Policy and Conservation Act.
The U.S. Strategic Petroleum Reserve (SPR), established in the wake of the 1973-74 oil embargo, serves as the nation's emergency stockpile to mitigate disruptions in commercial oil supplies and meet International Energy Agency (IEA) commitments. The reserve, currently holding 413 million barrels, is significantly below its peak of 726.6 million barrels in 2009 and its capacity of 714 million barrels. A substantial portion of this decline is attributed to sales totaling 280 million barrels over the past decade, often used as a budgetary measure.
Amid escalating geopolitical tensions in the Middle East and threats to oil tanker passage through the Strait of Hormuz, which have driven oil prices higher, the Biden Administration has announced a significant drawdown. The release of 172 million barrels from the SPR represents approximately 40% of the current inventory, aiming to stabilize markets. This action is coordinated with roughly 32 IEA member countries, who are collectively releasing an estimated 400 million barrels of oil.
Crude oil exchanges, a form of time-based 'loan' with premium barrels and transportation costs repaid to the SPR, can be completed within days. Sales and drawdowns are conducted competitively online, with deliveries potentially starting as early as 13 days after a sale announcement. The SPR primarily stores crude oil, with a historical ratio of sweet and sour crudes determined by specific needs, and is located in underground salt caverns along the U.S. Gulf Coast.