(Bloomberg) – The Trump administration is taking advantage of low oil prices and buying 1 million barrels to start refilling the nation’s depleted emergency crude supply.
The U.S. Strategic Petroleum Reserve is currently only around 60% full
The Energy Department announced Tuesday that it plans to buy oil for delivery in December and January, using a portion of the $171 million from President Donald Trump’s signature tax and spending law allotted for crude purchases.
“While this process won’t be complete overnight, these actions are an important step in strengthening our energy security and reversing the costly and irresponsible energy policies of the last administration,” Energy Secretary Chris Wright said in a statement.
West Texas Intermediate, the U.S. benchmark, is down about 30% since its peak in mid-January. It traded at about $58 a barrel on Tuesday, near the lowest since 2021.
That makes it an ideal time to refill the reserve, which at 408 million bbls is only about 60% full. But the Energy Department only has $171 million to buy crude — or enough for roughly 3 million bbls, based on today’s price.
“This administration doesn’t have anything left in the tank except the money Congress gave them, and that’s going to limit the ability to buy low,” said Kevin Book, managing director at ClearView Energy Partners LLC, a Washington-based consulting firm.
The reserve’s levels were sharply reduced under President Joe Biden, when gasoline prices spiked following Russia’s invasion of Ukraine. The drawdown of some 180 million bbls in 2022 cost about $280 million and delayed maintenance, according to the Energy Department.
Bids for the Energy Department’s 1 million barrel solicitation are due no later than 11:00 a.m. CT on Oct. 28, the agency said. The purchases will be through a spot-price-indexed contract.
