US Strategic Petroleum Reserve Refill Hinges on Loans and a $20 Billion Bill

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US Strategic Petroleum Reserve Refill Hinges on Loans and a $20 Billion Bill
PrimeXBT Editorial Team
Reviewed by PrimeXBT

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The U.S. Strategic Petroleum Reserve held about 283 million barrels at the end of September, its lowest level since 1982. The Energy Department is refilling it through loans repaid with interest in barrels, but a full refill would still require billions of dollars that Congress has not set aside.

The U.S. Strategic Petroleum Reserve held just 283 million barrels of oil at the end of September, the lowest level since October 1982. Draining the caverns was the easy part, according to Oilprice.com. Refilling them is slower, costlier and depends on factors nobody controls.

A loan, not a sale

In 2022, oil was sold and left the caverns, and it did not come back unless someone later paid to replace it. This time, the Energy Department is running the entire 172-million-barrel release as exchanges: companies borrow crude now and repay it later in barrels, with interest.

Winning bidders in the first round had to return 18% to 22% more oil than they borrowed, and later rounds pushed premiums as high as 28%. The trade works because of backwardation, when oil for delivery today costs far more than oil for delivery a year or two out. In June, however, the Energy Department offered 40 million barrels and awarded exactly 500,000, after calendar spreads collapsed.

Experts disagree on the floor

The department's stated minimum to keep the system running is about 70 million barrels. Siddharth Misra, a petroleum engineering professor at Texas A&M, puts the practical floor at 250 million to 300 million barrels. In the Dallas Fed's third-quarter energy survey, 31% of executives placed it between 100 million and 150 million barrels.

Congress set a floor of 252.4 million barrels, but exchanges do not fall under it. The Energy Department projects the reserve will bottom out around 243 million barrels once the full 172 million barrels are delivered.

Slow to refill, costly to finish

The reserve's design criteria call for a peak drawdown rate of 4.415 million barrels a day against a fill rate of 0.785 million. As of December 2025, the GAO found the reserve could fill at just 56% of its designed rate. Under perfect conditions, the Atlantic Council calculated, the system can take in 672,000 barrels a day, compared with the 1.4 million barrels a day that flowed out when releases started in March.

Even if every borrowed barrel returns, the reserve would sit at only about two-thirds of the roughly 680 million barrels the Energy Department says the system can effectively hold, by Oilprice.com's own estimate. The department has estimated about $20 billion to buy the remaining roughly 250 million barrels, while Congress set aside $171 million for crude purchases.

PVM estimated in August that returning 200 million barrels over two years would likely firm up the WTI forward curve. The next emergency could arrive with even less in the tank.

Source: Oilprice.com

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