U.S. Strategic Petroleum Reserve Lowest Level Since January 1985

The U.S. Department of Energy announced that crude inventory in the U.S. Strategic Petroleum Reserve (SPR) fell by 8.1 million barrels in the latest week to the lowest level in more than 35 years. The SPR fell to 453.1 million barrels in the week to Aug. 19. The draw was also the largest since the end of April and brought inventory to the lowest level since January 1985. The levels are consistent with President Joe Biden’s plan March to release 1 million barrels per day over six months from the SPR to bring down high fuel prices.

SPR Storage Sites

American Strategic Petroleum Reserve is a U.S. Government complex of four sites with deep underground storage caverns created in salt domes along the Texas and Louisiana Gulf Coasts.  The SPR came back in focus after the U.S. Department of Energy announced it will release 50 million barrels of oil from the Strategic Petroleum Reserve to lower oil prices.

The crude oil is sold to accredited oil companies via online auctions, and prices are set using a five-day average bracketing the date of delivery. The Energy Department has proposed to replenish the SPR by allowing it to enter contracts to purchase oil in future years at fixed, preset prices.

There are four SPR sites in the United States of America

 Crude Oil Storage by Site (as of July 31, 2022)

  • Bryan Mound – contains 182.9 MMB in 18 caverns – 66.8 MMB sweet and 116.1 MMB sour
  • Big Hill – contains 92.2 MMB in 14 caverns – 65 MMB sweet and 27.2 MMB sour
  • West Hackberry – contains 145.3 MMB in 21 caverns – 102.2 MMB sweet and 43.1 MMB sour
  • Bayou Choctaw – contains 39.3 MMB in 6 caverns – 1.1 MMB sweet and 38.2 MMB sour

Current authorized storage capacity is 714 million barrels

The highest the SPR has ever been was 726.6 million barrel it’s then authorized storage capacity on December 27, 2009; the inventory of 726.6 million barrels was the highest ever held in the SPR.

Current SPR Inventory

US SPR Nov 19, 2021
SPR Sites and Refining Centers

SPR Inventory Milestones

  • 2008.  Prior to Hurricane Gustav coming ashore on September 1, 2008, the SPR had reached 707.21 million barrels, the highest level ever held up until that date.  A series of emergency exchanges conducted after Hurricane Gustav, followed shortly thereafter by Hurricane Ike, reduced the level by 5.4 million barrels.
  • 2005.  Prior to the 2008 hurricane releases, the former record had been reached in late August 2005, just days before Hurricane Katrina hit the Gulf Coast.  Hurricane Katrina emergency releases of both crude oil sales and exchanges (loans) totaled 20.8 million barrels.
  • 1977.  First oil was delivered to the newly constructed SPR, 412,000 barrels of light sweet crude. 

Current days of import protection in SPR – At the end of CY 2021 (as of December 31, 2021), the SPR’s crude oil inventory was 594.7 MMbbl.  This is equivalent to approximately 1,206 days of supply of total U.S. petroleum net imports.

International Energy Agency requirement – 90 days of import protection (both public and private stocks).  In past years, the United States has met its commitment with a combination of SPR stocks and industry stocks.  The days of import protection may vary based on actual net U.S. petroleum imports and the inventory level of the SPR. 

Average price paid for oil in the Reserve – $29.70 per barrel

Investment to date – About $25.7 billion ($5 billion for facilities; $20.7 billion for crude oil).

Drawdown Capability

  • Maximum nominal drawdown capability – 4.4 million barrels per day
  • Time for oil to enter U.S. market – 13 days from Presidential decision

Past Sales

  • FY 2020 Mandated Sales: 9.85 million barrels
  • FY 2019 SPR Modernization Sale: 4.2 million barrels
  • FY 2019 Mandated Sales: 10.87 million barrels
  • FY 2018 SPR Modernization Sale: 4.74 million barrels
  • FY 2018 Mandated Sales: 14.17 million barrels
  • FY 2017 Mandated Sales: 10 million barrels
  • FY 2017 SPR Modernization Sale: 6.28 million barrels
  • 2014 – March: Test Sale – 5 million barrels
  • 2011 June: IEA Coordinated Release – 30,640,000 barrels  
  • 2005 September: Hurricane Katrina Sale – 11 million barrels
  • 1996-97 October; January; April:  Total non-emergency sales – 28 million barrels
  • 1990/91 September, January: Desert Shield/Storm Sale – 21 million barrels
    (4 million in August 1990 test sale; 17 million in January 1991 Presidentially ordered drawdown)
  • 1985 – November: Test Sale – 1.0 million barrels 

Source: Department of Energy

From The TradersCommunity US Research Desk