Bartered Oil Fills U.S. Strategic Petroleum Reserve

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Bob Meyer

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Bartered Oil Fills U.S. Strategic Petroleum Reserve

The U.S. emergency oil stockpile, known as the Strategic Petroleum Reserve (SPR) has added more than $6.5 billion worth of crude since November 2001 and they did so without spending a dime.

President Bush decided to fill the SPR to its then 700-million-barrel capacity, and the government did so by taking advantage of an existing barter program between producers and the federal government, which sees oil bartered for the use of government land.

After Hurricane Katrina caused production slowdown, the President—in an effort to ease supply shortages—sold 11 million barrels of oil to petroleum companies for between $60 and $66 a barrel, bringing $702 million into federal coffers.

The Department of Energy estimates that the SPR’s stock has been acquired for an average cost of $27 per barrel. If it were all sold today at prevailing rates, it’d be worth $44 billion.