Trump returns attention to "black gold" - Fully filling the strategic reserve requires about 24 billion dollars
President Donald Trump's plan to replenish the U.S. emergency crude oil storage system would help protect against future oil price shocks.
About half of the Strategic Petroleum Reserve, known as the SPR, was depleted between 2020 and 2023, largely because former President Joe Biden sold fuel to drive down prices after Russia's invasion of Ukraine while Congress ordered the sales to fund the government. U.S. lawmakers must approve the purchase of $24 billion worth of crude oil needed to fully replenish four storage sites along the Gulf Coast.
Purchases on that scale would take time and could drive up oil prices, undermining Trump's promise to cut costs in half.
The reserve had 394.6 million barrels on January 17, about 55% of its maximum capacity of 714 million barrels, after Biden ordered the largest sale, bringing storage levels to the lowest since the 1980s.
West Texas Intermediate crude futures are currently trading at around $76 per barrel, and the Trump administration would need to buy 320 million barrels to fill the system. That would cost around $24.3 billion.
Such a large trade is a delicate balancing act. The U.S. will need to spread out the purchases over time to avoid a spike in oil prices. In any case, the American Petroleum Institute estimated last year that it would take at least 19 months to fully replenish the Strategic Petroleum Reserve.
Created after the Arab oil embargo in the 1970s as a national energy security net, a fully stocked Strategic Petroleum Reserve sends a message to OPEC and its allies that the U.S. should not bow to efforts to raise prices. At least not immediately.
The 1975 law that established the reserve says a president can order a full withdrawal of oil from the reserve in the event of a "severe supply disruption" that threatens the national security or economy. A limited withdrawal (up to 30 million barrels) can be ordered in the event of "a domestic or international energy supply shortage of significant scope or duration."
China, India, Japan and South Korea are among the top oil-reserve countries in Asia. European Union member states hold 823 million barrels of emergency oil reserves as of May 2024, according to Eurostat.
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