U.S. to Return Emergency Oil Reserve to Prior Levels by Year-End

U.S. oil stocks in the Strategic Petroleum Reserve (SPR) at year-end will be at or exceeding the level that would have existed prior to massive sales two years ago, U.S. Energy Secretary Jennifer Granholm said on Monday.

Stocks will reach those levels in part on the cancellation of congressional-mandated sales of about 140 million barrels, the secretary added. The reserve currently holds about 362 million barrels, down from 638 million three years ago.

Other congressionally mandated sales may also be canceled, Granholm said.

Having the SPR refilled is a congressional priority and “that’s a conversation we’ll be having with them,” Granholm said.

Completion of maintenance at one storage site will allow the United States to buy more oil, Granholm said at the CERAWeek energy conference in Houston.

Energy officials are monitoring the rise in U.S. oil prices and its impact on repurchases, Granholm said. The Department of Energy had aimed to repurchase the oil under $79 a barrel. U.S. crude futures was trading above $82 on Monday.

She also said the Biden administration’s liquefied natural gas permitting pause “will be long behind us by this time next year.” The pause is temporary and for study purposes only, she stressed.

She did not say when the export authorizations could resume, but ruled out estimates of a 10- to 14-month delay.

“The LNG pause should not be impacting major decisions globally, because it is simply a temporary pause,” the secretary said, when asked about concern about worries of higher coal buying in Asia.