US Energy Department seeks up to 4.5 million barrels of oil for Strategic Petroleum Reserve
The US Department of Energy (DOE) is making moves to secure up to 4.5 million barrels of oil for the country’s Strategic Petroleum Reserve (SPR) from October through December. This initiative is part of the department’s plan to replenish the SPR, with a focus on reducing prices for American consumers and businesses.
Recently, the department offered to purchase oil to restock the SPR, with US Energy Secretary Jennifer Granholm expressing confidence in the quick replenishment of the reserve this year. This action comes after US President Joe Biden authorized the sale of 180 million barrels from the emergency reserve in response to the Russian invasion of Ukraine.
The DOE aims to secure oil at a price of $79 per barrel or less, significantly lower than the average price of $95 per barrel for emergency SPR sales in 2022. However, current market prices indicate a higher cost, with the West Texas Intermediate benchmark closing at $82.10 per barrel.
The department has already acquired a substantial amount of oil at an average price of $77 per barrel for delivery to the Big Hill SPR site. Additionally, various projects, including the completion of the Bayou Choctaw’s Life Extension 2 Project, are part of the DOE’s strategy to refill the SPR at favorable prices.
The SPR, the world’s largest emergency crude oil supply, is stored at four sites along the coasts of Texas and Louisiana. The DOE continues to evaluate options for refilling the reserve while considering market developments and taxpayer interests. Bids for solicitation are due on July 18, 2024, as the department works to maintain a strategic oil reserve to mitigate disruptions in petroleum supplies.
