In December 1975, the Energy Policy and Conservation Act (EPCA) was passed, officially establishing the Strategic Petroleum Reserve (SPR) as a reserve of up to 1 billion barrels. To store the reserve oil, the U.S. government acquired several salt caverns along the Gulf of Mexico coastline. The first crude oil was delivered to the SPR in 1977 and stored at the West Hackberry storage site near Lake Charles, LA. Other major storage sites include: Bryan Mound and Big Hill in Texas and Bayou Choctaw in Louisiana. Total storage capacity at the SPR is currently 700 million barrels.
In mid-November 2001, President Bush directed the Department of Energy (DOE) to fill the SPR to its capacity of 700 million barrels to "maximize long-term protection against oil supply disruptions." On August 17, 2005, the SPR reached its goal of 700 million barrels, just two weeks before Hurricane Katrina hit. On August 31, 2005, President George W. Bush authorized the SPR to loan oil to help refineries whose operations had been affected by Hurricane Katrina. In addition, the President announced the sale of 30 million barrels to maintain supplies and calm markets. As of November 14, 2005, the SPR contained around 684 million barrels of oil -- the largest emergency oil stockpile in the world. The SPR has a maximum drawdown capability of 4.3 million bbl/d for 90 days, with oil beginning to arrive in the marketplace 15 days after a presidential decision to initiate a drawdown. The SPR drawdown rate declines to 3.2 million bbl/d from days 91-120, to 2.2 million bbl/d for days 121-150, and to 1.3 million bbl/d for days 151-180. Prior to Hurricane Katrina, other withdrawals from the SPR occurred in 1985, 1990, 1991, 1996-97, and 2004.
Under EPCA, there is no preset "trigger" for withdrawing oil from the SPR. Instead, the President determines that drawdown is required by "a severe energy supply interruption or by obligations of the United States" under the International Energy Agency. EPCA defines a "severe energy supply interruption" as one which: 1) "is, or is likely to be, of significant scope and duration, and of an emergency nature;" 2) "may cause major adverse impact on national safety or the national economy" (including an oil price spike); and 3) "results, or is likely to result, from an interruption in the supply of imported petroleum products, or from sabotage or an act of God." Should the President decide to order an emergency drawdown of the SPR, oil would be distributed mainly by competitive sale to the highest bidder(s). This would be accomplished in a 4-step process, including a "Notice of Sale," receipt of bids, selection of bidders, and finally delivery of oil.

Since August 1996, the Iran-Libya Sanctions Act (ILSA) has imposed mandatory and discretionary sanctions on non-U.S. companies that invest more than $20 million annually (lowered in August 1997 from $40 million) in the Iranian oil and natural gas sectors. On August 3, 2001, President Bush signed into law the ILSA Extension Act of 2001. This provided for a 5-year extension of ILSA with amendments that affect certain of the investment provisions. In addition, the United States has maintained various sanctions against Iran since 1979, following the seizure of the U.S. embassy in Tehran on November 4 of that year. In 1995, President Clinton signed two Executive Orders prohibiting U.S. companies and their foreign subsidiaries from conducting business with Iran. Executive Order 12957 specifically banned any "contract for the financing of the development of petroleum resources located in Iran." On March 10, 2005, President Bush extended sanctions for another year, citing Irans "continued support for terrorism, its efforts to undermine the Middle East peace process and its efforts to acquire weapons of mass destruction."

In April 2004, the United States removed Libya from the ILSA sanctions, following fulfillment of that countrys commitments to rid itself of weapons of mass destruction and to renounce terrorism. On September 20, 2004, the President signed an executive order terminating the national emergency (declared in Executive Order 12543 of January 7, 1986), with respect to the policies and actions of the Government of Libya, revoking Executive Order 12544 of January 8, 1986 and Executive Order 12801 of April 15, 1992, all of which imposed sanctions against Libya in response to the national emergency. The new September 2004 executive order also revokes Executive Order 12538 of November 15, 1985, which prohibited the importation into the United States of petroleum products refined in Libya. This lifting of sanctions has opened the door to a potential return of U.S. oil companies to Libya for the first time in nearly 20 years.
Besides Iran, the United States maintains sanctions on two other oil producing nations - Sudan and Syria.