United States: The U.S. Energy Secretary Chris Wright approaches the government for potential funding exceeding $20 billion to implement former President Donald Trump’s SPR Strategic Petroleum Reserve replenishment policy according to Bloomberg News. The objective is to return petroleum storage capacity to its nearly maximum size in order to uphold energy security and protect supply steady state, as reported by Reuters.
Why the SPR Matters
Since its foundation in 1975 the SPR functions as an emergency oil stockpile that protects against disruptions caused by natural disasters and geopolitical tensions along with economic crises. The current size of the Strategic Petroleum Reserve stands at 395 million barrels whereas its original design capacity was 727 million barrels.
Biden’s SPR Drawdowns & Market Impact
President Joe Biden’s leadership contributed to the rapid decline of SPR reserves by executing sales that totaled 300 million barrels of which 180 million barrels were drawn in 2022 due to Russia’s invasion of Ukraine. Gas price stabilization was one purpose of the reduction which brought the reserve to a 40-year low.
Congress to Decide on $20B Refill Plan
The approved funding enables the U.S. to buy 301 million barrels of crude oil at market value which would restore national crude oil stocks to nearly 700 million barrels. The approval of the oil reserve funds rests with lawmakers who need to address both energy security disputes and federal funding debates, as reported by Reuters.