Strategic Petroleum Reserve Oil Releases: October 2021 Through October 2022

Strategic Petroleum Reserve Oil Releases: October 2021 Through October 2022

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INSIGHTi

Strategic Petroleum Reserve Oil Releases:
October 2021 through October 2022
April 22, 2022
The Biden Administration announced plans to release up to 260 million barrels of crude oil from the U.S.
Strategic Petroleum Reserve (SPR) from October 2021 through October 2022. Oil stocks in the SPR were
approximately 618 million barrels at the end of September 2021. Releases planned during this period
include exercise of three SPR authorities: (1) mandatory sales, (2) exchanges, and (3) emergency sales
(see Figure 1). Each release type differs in terms of congressional authority, use of funds, and replacing
released barrels.
Figure 1. SPR Oil Releases
October 2021cccccchfruggbedkdeedkirnitbbkbujrhjcflv–October 2022

Source: CRS, information from Department of Energy announcements.
Notes: Schedules include early delivery options.
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Background
In the wake of a politically-motivated, multi-country oil embargo that contributed to high fuel prices,
perceived shortages of energy commodities, and U.S. energy security concerns, Congress created the SPR
(42 U.S.C. §6231 et seq.) in 1975. Congressional intent for the SPR includes two statutory energy policy
objectives: (1) reduce the impact of petroleum supply disruptions, and (2) carry out U.S. obligations under
the international energy program (IEP)—a multilateral agreement subject to international law. The
International Energy Agency (IEA) administers the IEP. Furthermore, congressional findings state that the
SPR is both a national security and an energy security asset.
Generally, statutes authorize unlimited SPR drawdowns following either a presidential finding of a severe
energy supply interruption or an IEP obligation. Statutes also authorize limited drawdowns—no more
than 30 million barrels during a 60-day period and subject to minimum storage levels (252.4 million
barrels as of April 2022)—for the purpose of either preventing or reducing the impact of domestic energy
supply interruptions. Prior to 2022, there had been three emergency SPR releases: (1) Operation Desert
Storm in 1991, (2) Hurricane Katrina in 2005, and (3) Libya oil supply disruptions in 2011. These
emergency SPR drawdowns resulted in sales ranging from 11 million barrels to 30.6 million barrels.
From time to time, Congress mandates SPR crude oil sales to pay for other legislative priorities. Since
2015, Congress has enacted eight laws mandating the sale of up to 358.6 million barrels between FY2017
and FY2031. To date, 93 million barrels have been sold. Additionally, Congress required approximately
$1.4 billion of SPR oil sales between FY2017 through FY2022, resulting in the sale of nearly 22 million
barrels, to pay for an SPR modernization program.
Mandatory Sales
During the time period covered in this Insight, two mandatory sales have been completed. Mandatory sale
1 consisted of 20 million barrels: 8 million in FY2022 required by P.L. 114-74 and 12 million, of 30
million between FY2022 and FY2025, required by P.L. 115-123. Mandatory sale 2 consisted of the
remaining 18 million barrels required by P.L. 115-123 before the end of FY2025. Mandatory sales are
price competitive and follow SPR standard sales provisions. Sale proceeds are deposited into the U.S.
Treasury general fund. There is no statutory requirement to replace mandatory sales.
Exchanges
Exchanges are conducted under SPR oil acquisition authorities. Frequently, exchanges are structured like
short-term loans. Crude oil is provided to an entity (e.g., oil refiner), who agrees to return an equivalent
oil volume plus additional “premium” barrels to the SPR at a future date. Premium barrels are necessary
in order to acquire oil under the transaction. The Biden Administration’s 32-million-barrel competitive
exchange requires return of exchange oil, plus premium barrels, by the end of FY2024.
Emergency Sales
Responding to oil market uncertainty and price volatility related to Russia’s military operations in
Ukraine, President Biden announced two emergency SPR crude oil sales in March and April of 2022. The
first emergency sale was part of a multi-country release, coordinated by the IEA, that resulted in
approximately 30 million barrels being sold from the SPR. Following President Biden’s finding of a
severe energy supply interruption, a second emergency sale of up to 160 million barrels is one element of
the Administration’s plan to address high consumer fuel prices. Should all barrels be sold, this would be
the largest emergency SPR release. Emergency sales are also price competitive and follow standard sales

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procedures. Sale proceeds are returned to the SPR Petroleum Account, which can be used to replenish the
reserve.
Policy Considerations
Effects on consumer fuel prices and U.S. energy security are often considered and debated when SPR oil
is released, especially under emergency authorities. Emergency SPR sales could average one million
barrels per day (bpd) between May 2022 and October 2022. Roughly equivalent to Libya’s daily oil
production, emergency SPR sales—combined with other emergency releases—could materially affect
global petroleum production/consumption balances and put downward pressure on prices. Market balance
is an important metric that can influence oil price discovery. Relatively small imbalances can translate
into large price movements. However, actual balances and price levels during the emergency release
period will be determined by numerous other market factors such as global economic conditions,
petroleum product demand, and potential decline of Russia’s oil production (nearly 10 million bpd) and
petroleum exports (approximately 7.8 million bpd). Oil and gasoline prices could be stable, trend higher,
or trend lower during the emergency release period.
Historically large emergency sales could raise concerns about the adequacy of SPR oil stocks to address
future energy supply interruptions. While there is no statutory minimum SPR stockholding requirement,
limited drawdown authority is contingent on stock levels (42 U.S.C. §6241(h)). Furthermore, IEP
signatories are required to hold reserves equal to 90 days of net petroleum imports during the previous
calendar year. A net petroleum exporter in 2021, the United States is not required to hold emergency
reserves in 2022. However, IEA-coordinated oil releases generally assign contributions for each member
based on consumption. Historically, U.S. contributions generally range between 30 and 60 million barrels.
Emergency sale proceeds in the SPR Petroleum account can fund replacement oil acquisitions. The Biden
Administration has indicated intent to restock the reserve. There are neither statutory requirements nor
specific market conditions that trigger oil purchases. Congress could use its oversight authorities and
engage with the Administration about SPR restocking plans.

Author Information

Phillip Brown

Specialist in Energy Policy

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff
to congressional committees and Members of Congress. It operates solely at the behest of and under the direction of
Congress. Information in a CRS Report should not be relied upon for purposes other than public understanding of
information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role.

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