US SPR takes on new role

Strategic stocks have become as much a market management tool as a security of supply buffer, and this new tactic is likely to continue beyond the next election

The purpose and optimal size of the US Strategic Petroleum Reserve (SPR) has become the subject of debate since the Biden administration adopted an at-least implicit price band mechanism for withdrawals from and refills of the reserve in 2022. The US Department of Energy (DOE) released more than 220m bl from the SPR in 2022 to combat a 50% jump in benchmark light crude prices—to $120/bl—due to actions associated with Russia’s invasion of Ukraine in February of that year (see Fig.1). The initial 180m bl—released under IEA obligation, unlike the remainder—fetched an average price of $95/bl, suggesting an implicit top to the price band. A