U.S. crude oil stockpiles 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 March 18.

The U.S. is replenishing the SPR, which currently holds about 362 MMbbl, down from 638 MMbbl three years ago before the sale of a record amount of crude, and as one of the stockpile's sites winds down maintenance.

Stocks will reach those levels in part on the cancellation of congressional-mandated sales of about 140 MMbbl, the secretary added. Other congressionally mandated sales may also be canceled, Granholm said at the CERAWeek by S&P Global energy conference in Houston.

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 SPR storage site will allow the U.S. to buy more oil, Granholm said.

Energy officials are monitoring the rise in U.S. oil prices and its impact on replenishing the reserve, Granholm said. The Department of Energy had aimed to repurchase the oil under $79/bbl. U.S. crude futures were trading above $82 on March 18.

She also said the Biden administration's LNG permitting pause "will be long behind us by this time next year."

She did not say when the export authorizations could resume, but ruled out estimates of a 10- to 14-month delay, calling the pause temporary and for study purposes only.

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

The $60/bbl price cap on Russian oil imposed by the U.S. and G7 allies was effective, Granholm said, adding the U.S. would continue to evaluate appropriate price levels as circumstances change.

The price cap imposed in December 2022 by the Group of Seven countries, the European Union and Australia bans the use of Western maritime services such as insurance, flagging and transportation when tankers carry Russian oil priced at or above $60.

Comments