A customer at the Circle K gas station on Roosevelt and 7th streets in Phoenix fills up her car with gas on June 23, 2022. (File photo by Omar Iakub/Cronkite News)
WASHINGTON — Dozens of huge salt caverns along the Gulf Coast hold millions of barrels of crude oil set aside for national emergencies, but sit at 44% below capacity.
President Donald Trump blasted his predecessor for tapping the Strategic Petroleum Reserve when oil prices spiked in the wake of Russia’s invasion of Ukraine. He promised to refill the stockpile.
Three months into his term, there is no sign he has started.
Tapping the reserve “was a good decision” at the time, said Sarah Emerson, founder and president of ESAI Energy, a consulting firm. Refilling it now would also be smart, she added, given that oil prices have dipped.
Department of Energy records show that the last time the government bought oil for the reserve was Nov. 8, under President Joe Biden – a $178.7 million contract for 2.4 million barrels to be delivered in April and May.
The Trump administration has not announced any purchases; such contracts are a matter of public record.
Crude oil prices surged after the invasion of Ukraine. The U.S. embargoed Russian crude and other exports in March 2022. European allies followed within a few months, taking millions of barrels off the global market daily.
Selling oil from the U.S. reserve was intended to ease shortages and blunt price pressure. Biden did that starting on March 1, 2022. The last sale was about five weeks later.
Republicans attacked Biden for the move at the time, and during the 2024 election.
“He’s using the strategic reserves, which is meant for military, which is meant for war and very important things,” Trump said last August on Fox News. “We have to fill up the strategic reserves immediately.”
The urgency faded once he returned to office in January.
The reserve can hold 714 million barrels. The level was about 400 million on April 4, according to the U.S. Energy and Information Administration.
Topping off the salt caverns would take months, especially if the government wants to avoid creating so much demand that it pushes up prices.
And it would not be cheap: At current prices, 314 million barrels would cost $19.5 billion.
That could explain any hesitance by the White House to buy more aggressively.
The White House and the Department of Energy did not respond to inquiries about why the Trump administration isn’t buying oil for the reserve and when it plans to do so.
Gasoline prices hit $5.70 per gallon in Phoenix in June 2022, three months after the invasion, according to data from the Bureau of Labor Statistics. Within six months the average price dropped to about $3.70.
The price of West Texas Intermediate crude, the benchmark of North American oil, is $62 per barrel, down 20% since Trump took office.
That makes this a good time to replenish the reserve, experts said.
“Oil prices are falling,” Emerson said.
The Energy Department historically has begun buying oil for the reserve when prices drop below a certain point. The Biden administration did not set a trigger price, according to the nonpartisan Congressional Research Service. It is unclear whether the Trump administration has a trigger point in mind.
Since 2009, the Energy Department has used direct purchases to fill the reserve. Before then the government used the Royalty-in-Kind Program, which entitles it to 15% of production from federal leases in the Outer Continental Shelf.
Crude oil began filling the salt caverns in 1977.
Previous presidents and their aides had suggested an emergency oil reserve at least since World War II. Congress created the reserve in 1975 and President Gerald Ford signed the legislation in response to the 1973-1974 oil crisis. Oil-producing Arab countries had cut off supplies to protest U.S. aid to Israel during the Yom Kippur War.
“The economies of the consuming countries were really impacted by the run-up in prices,” Emerson said. “The idea was to create a buffer.”
Presidents have tapped into the reserve three times besides 2022, not counting “loans” of oil after hurricanes and other emergencies that created temporary shortages.
In 1991 during Operation Desert Storm, when the U.S.-Iraq war disrupted global supply, the U.S. sold 17.3 million barrels, though it was prepared to sell twice that much.
After Hurricane Katrina in 2005 put Gulf refineries and pipelines offline for months, the government sold 11 million barrels.
In 2011, the U.S. sold 30 million barrels amid supply disruptions caused by the Libyan civil war.
“It’s like an insurance policy,” Emerson said. “How big of an insurance policy do you need?”
