The Strategic Petroleum Reserve (SPR) is a concept and a provision for an emergency stockpile of crude oil, primarily referring to the one maintained by the United States Department of Energy (DOE), which is the world's largest government-owned emergency supply. Its origin lies in the 1973–1974 oil embargo, which exposed the US economy's vulnerability to supply shocks and price spikes. The SPR was authorized by the Energy Policy and Conservation Act (EPCA), signed by President Ford on December 22, 1975, to mitigate future supply disruptions. The first oil was delivered on July 21, 1977.
The mechanism involves storing crude oil in massive underground salt caverns along the Gulf Coast in Texas and Louisiana. The US President has the authority under the EPCA to order a drawdown in the event of a "severe energy supply interruption" or to fulfill an obligation to the International Energy Agency (IEA). The oil is typically sold via a competitive auction to US companies. The SPR also uses "exchange agreements," where private companies borrow oil during short-term disruptions and repay it with an additional premium quantity of oil.
The SPR is directly connected to the IEA, an intergovernmental organization established in 1974. Full IEA members are generally required to maintain oil stocks equivalent to at least 90 days of their previous year's net imports. India, which has its own strategic reserves managed by the Indian Strategic Petroleum Reserves Limited (ISPRL), has been an Associate Member of the IEA since 2017 and formally requested full membership in October 2023, with discussions starting in February 2024.
In recent years, the SPR has seen significant changes, including substantial releases in 2022 in coordination with the IEA in response to the Russia-Ukraine war. These drawdowns, along with others, have caused the inventory to fall to its lowest level since 1983. The statutory purpose of the SPR has evolved from strictly responding to severe supply disruptions to also addressing broader market stability and price mitigation.