Strategic Petroleum Reserve 101
Understanding the SPR isn't hard but one thing people miss is the salt domes can only be emptied and filled a total of five times.
Here's the "The Merge" rundown (mostly):
The SPR comprises 61 massive underground salt caverns in 4 locations in Texas and Louisiana. A typical underground storage cavern is a cylinder shaped 200 feet wide and 2,000 feet deep, and collectively the 61 caverns can store 700+ million barrels of oil.
The whole thing was developed in the aftermath of an OPEC oil embargo against the U.S. for supporting Israel during the Yom Kippur War. Fuel prices at the pump tripled, so the SPR was created in 1975 to provide a strategic stockpile to guard against future oil disruptions for the U.S. economy.
Normally, the U.S. only releases oil from the SPR when there is a threat to oil import supplies: Desert Storm (1991), Hurricane Katrina (2005), and the Invasion of Ukraine (2022) are stand-out examples.
However in 2022, solely to help President Biden and the Democrats secure the midterm elections (The Dems lost the House but gained one Senate seat giving them a 51/49 majority) Biden authorize a 6-month SPR release of 1 million barrels per day. This was the largest SPR release in history.
Unfortunately the SPR was less than full to begin with. It's interesting to note President Trump tried to fill the SPR during his 1st term when prices hit rock bottom but Chuck Shumer and the Democrats killed the administration's efforts.
Making matters worse, the SPR is designed to empty much faster than it fills—a deliberate wartime/emergency feature. The system can surge 4.4 millions of barrels per day into the market quickly, but it only refills at roughly 400k barrels a day.
Instead of a few billion basic bar napkin math says it will now take $40B to refill the SPR. Money Congress must appropriate to purchase. Then, it will take almost 4 years to refill it, and that’s assuming max fill rate for 24 hours a day.
Thanks to President Biden using the SPR as his personal political chip that was unwisely played the state of the SPR is now a key national security issue, not just an economic issue.
Based on how the Iran War unfolds in the coming days or weeks, political pressure may lead to more SPR drawdown especially as the situation at Kharg island evolves and you can bet China is watching this closely, knowing that the U.S. oil reserves are in a dire state until 2030.
What is absolutely insane? Duh, Democrats and their TDS driven hateful Trump politics. In March of 2020, Senate Minority Leader Schumer and congressional Democrats effectively prevented the Trump administration from refilling the Strategic Petroleum Reserve (SPR) with a major purchase that would have totaled $3,000,000,000 during his first term.
This happened in late March 2020, during negotiations for the $2 trillion CARES Act COVID-19 stimulus package which passed the Senate on March 25 and was signed into law on March 27.
The SPR funding provision was stripped from the final stimulus bill. Schumer publicly highlighted its removal in an email to senators, calling it the elimination of a "$3 billion bailout for big oil." Democrats opposed it as corporate welfare for the energy industry.
Sadly the average price of a barrel in March of 20200was between 27 and 31 dollars depending on the grade. Not only would this have filled the SPR it would have eventually easily created $5+ billion in revenue.















