The US is refilling strategic oil reserves as fast as it can amid lower prices, but there are physical limits, Energy Department official says

  • The Strategic Petroleum Reserve is being refilled with 3 million barrels a month as oil prices fall.

  • But refills have a limit because of the physical capacity of the reserves, a top energy official has said.

  • The SPR has 352 million barrels of oil, which is still less than half of 2010 highs.

The US's emergency stockpile of oil is being refilled as oil prices slide lower, but the pace has run into a physical limit.

The Biden administration drained 180 million barrels from the Strategic Petroleum Reserve last year to stabilize prices after they spiked in the aftermath of Russia's invasion of Ukraine. Now, 3 million barrels of oil a month are going back in.

"We are refilling as much as we can," David Turk, the deputy energy secretary, said on Bloomberg TV on Monday. "We've been doing that for the last several months. And at this price level, we'll keep doing it."

WTI crude is trading at $73 a barrel, down from its September high of nearly $94. That drop in prices arrives as US crude production has set fresh record highs of more than 13.2 million barrels a day.

But as low as prices may be, there's a limit to how much oil can be funneled into the SPR. Turk said 3 million barrels a month was the current physical limit of how much the US could buy back.

"So we will be doing at least 3 million barrels, and we hope we can bring more capacity online at these price levels to buy as much as we can to refill to make sure we've got that available when we need it in the future," he added.

The current stock of oil in the SPR is roughly 352 million barrels, according to the Energy Information Administration, hovering around 40-year lows and less than half of the all-time highs from 2010.

Dan Yergin, an energy expert, said in October after oil prices jumped in the wake of the Israel-Hamas conflict that the SPR levels were almost past the comfort level to use.

"We've used about half of it, so it would be harder to use it," he told CNBC. "And we're kind of getting to a level where you don't want to use it."

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