US emergency oil stockpiles drop to lowest level since 1983 as gas prices tick up

The Strategic Petroleum Reserve (SPR) fell to its lowest level since 1983 last week as U.S. gasoline prices and oil prices ticked up, according to federal data released Wednesday.

The level of the SPR — an emergency stockpile of crude oil managed by the Department of Energy (DOE) — declined to 375.1 million barrels last week, marking the first time it has fallen below 378 million barrels since December 1983, according to the Energy Information Administration. Prior to last week, the reserve's lowest level since 1983 was recorded on Dec. 30, 1983, when it hit 378.3 million barrels.

Meanwhile, the average pump price nationwide ticked up for the second consecutive day Wednesday, hitting $3.13 per gallon, according to a AAA database. And Tuesday the West Texas Intermediate index, the U.S. oil benchmark, increased 1% to more than $80 per barrel and the Brent crude index, the top global oil benchmark, increased 2% past $85.50 per barrel.

In an effort to curb rising gas and oil prices, President Biden first ordered the DOE to release oil from the SPR on Nov. 23, 2021, saying it was a "major effort to moderate the price of oil" and lower prices at the average "corner gas station." Then, in March, Biden announced a 30-million-barrel release and an historic 180-million-barrel release following Russia's invasion of Ukraine which upended global energy markets.

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In October, Biden said the DOE would issue a sale of 15 million barrels of oil from the SPR, the final release tied to the March announcement. He also called on the DOE to prepare for "additional significant SPR sales" throughout the winter.

"Families are hurting. You’ve heard me say before, but I get it. I come from a family — if the price of gasoline went up at the gas station, we felt it," Biden remarked on Oct. 19. "Gas prices hit almost every family in this country, and they squeeze their family budgets."

However, Republicans and energy groups have argued the SPR releases have failed to effectively lower gas prices and have made the U.S. more vulnerable to major supply disruptions in the future. Despite the historic releases, gas prices climbed past $5 per gallon in June, reaching an all-time high.

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GOP lawmakers have also announced oversight efforts and introduced legislation to prevent further releases. Last month, Senate Energy and Natural Resources Committee Ranking Member John Barrasso, R-Wyo., and House Energy and Commerce Committee Ranking Member Cathy McMorris Rodgers, R-Wash., sounded the alarm that mismanagement of the SPR may damage the reserve's infrastructure.

"As Secretary of Energy, you have overseen the largest SPR drawdown in history, selling more than 245 million barrels since President Biden’s first day in office," Barrasso and McMorris Rodgers wrote to Energy Secretary Jennifer Granholm. "This has occurred as gas prices remain high and supply chain shortages continue to plague our economy."

"Instead of unleashing American energy production, you have depleted our strategic stockpile while failing to establish long-term plans for the optimal size, configuration, maintenance, and operational capabilities of the reserve," they added.

In December 2021, Barrasso and other GOP members of the Senate Energy and Natural Resources Committee introduced the Strategic Production Response Act. The bill would prohibit the DOE from tapping the SPR for reasons other than a "severe energy supply interruption" until the federal government issues a plan to boost domestic oil and gas production.  

In June, McMorris Rodgers and Rep. Fred Upton, R-Mich., the top GOP member on the Energy and Commerce Committee's energy subpanel, penned a letter to Granholm demanding additional info on the Biden administration's handling of the SPR. They warned the rapid depletion of the stockpile would allow Russia, China and Middle Eastern nations to "gain geopolitical leverage" over the U.S. 

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"It is imperative that DOE maintain the nation’s petroleum reserves in a manner that does not limit our ability to prevent or reduce the adverse impacts of true energy supply shortages," the committee Republicans wrote in the letter. 

"Even while the United States is a net exporter of crude oil and petroleum products, the SPR must maintain sufficient inventory and operational capabilities to mitigate potential interruptions, such as those that occurred in recent years following hurricanes in the Gulf of Mexico," their letter continued. "This is critical for America’s energy security and national security."

Earlier this month, the DOE announced a plan to purchase up to 3 million barrels of oil as part of its plan to begin refilling the SPR. Contracts are expected to be awarded in early January.

The federal government established the SPR after Congress passed the Energy Policy and Conservation Act, legislation that came about because of the 1973 oil embargo by Arab nations. The stockpile was intended for emergency shortages, terrorism and natural disasters.