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Donald Trump has said he will immediately fill up the US Strategic Petroleum Reserve if he becomes president in November, a move that could boost oil demand by hundreds of millions of barrels.
“We have to fill up the strategic reserves immediately,” the Republican presidential candidate said in an interview with Fox News on Wednesday.
As of July 26, the SPR contained 375mn barrels of oil, just over half its capacity. Returning it to roughly the levels seen during Trump’s presidency would require the US to buy just under 300mn barrels of crude. Such a purchase would require approval for new funds from Congress.
The world’s largest supply of emergency crude oil, held in huge salt caverns along the coastline of the Gulf of Mexico, was set up in the 1970s in response to a series of oil crises.
In 2022, President Joe Biden released roughly 180mn barrels to tame rising fuel prices in the wake of Russia’s invasion of Ukraine. Since then, the reserve has become a trigger point for Republicans, who have complained that the Biden administration plans to use the SPR to keep petrol prices low in an election year. The US consumes about 20mn barrels of oil a day, according to the US Energy Information Administration.
But in recent weeks, the White House has moved to fill up the SPR, taking advantage of a lull in oil prices. Last week, the Department of Energy said it had bought another 4.65mn barrels.
Saudi Aramco, the world’s largest oil company, said in its earnings call on Tuesday that it expected such purchases to continue. “We are seeing more plans to replenish strategic crude oil inventories, which we anticipate will contribute healthy oil demand over the next few months,” said chief executive Amin Nasser, referring to purchases by the US and China.
Giovanni Staunovo, a commodity analyst at UBS, said there was currently enough spending authorised by Congress to buy about 15mn barrels more crude.
“Properly utilised strategic oil inventories can reduce oil price volatility, so it makes sense to have sufficiently high inventories,” he added. “But considering the amount of gasoline the US consumes, holding strategic inventories of refined products would make more sense.”
Trump told Fox News that, while he was president: “I was filling that up at levels that they have never seen before.” The SPR was drawn down by 57mn barrels during Trump’s presidency, according to EIA data.
Amrita Sen, director of research at Energy Aspects, noted that during Trump’s presidency, Congress had mandated a series of sales to reduce the size of the SPR to 400mn barrels by 2027.
The price of benchmark Brent crude was up 2.1 per cent on Wednesday at $78.12, around the level prior to Trump’s comments.
