The Department of Energy will begin slowly refilling the nation’s oil stockpile following the record drawdowns President Joe Biden ordered more than a year ago to combat the rise in gasoline prices that followed Russia’s invasion of Ukraine.
The department will purchase 3 million barrels to begin replacing the more than 200 million it drew down and sold in 2022, and it will do so at a profit. Oil was sold last year at an average of $95 per barrel but will be acquired at $73 per barrel, the Department of Energy said.
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“Today’s announcement advances the President’s replenishment strategy following his historic release from the [Strategic Petroleum Reserve] to address the significant global supply disruption caused by Putin’s war on Ukraine,” the department said in an announcement.
The refill effort advances as the Strategic Petroleum Reserve sits at its lowest level in decades due to the drawdowns, which Biden justified after oil prices skyrocketed as the market priced the consequences of a leading global oil producer going to war.
Critics of the drawdowns included many Republicans, who said Biden was misusing the reserve for his political advantage during an election year and argued the lower storage numbers made the country more vulnerable.
The department’s announcement comes after Secretary Jennifer Granholm cast doubt earlier in the year on the prospect of beginning the acquisition process in 2023 due to maintenance activities at the department’s storage sites.
Oil prices have also continued to fluctuate into and out of the department’s targeted purchase price range for several months, complicating the Biden administration’s plans.
Granholm later announced in May, however, that the department would seek to purchase oil during the summer, and it issued a solicitation for 3 million barrels of oil days later.
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The department awarded contracts on Friday for those 3 million barrels, with delivery scheduled for August, and issued another solicitation for 3 million additional barrels.
The department first tried to start the acquisition process in December but denied all the offers it received, saying they didn’t meet the specifications or desired price point, which was set between $67 and $72.
