US Department of Energy announces new solicitation to purchase oil for Strategic Petroleum Reserve

Building on the direct purchase strategy that has secured over 50 million bbl, this action is another step in DOE’s plan to make consistent solicitations when oil prices are favourable for taxpayers. DOE continues to aim for US$79/bbl or less, significantly lower than the average of approximately US$95/bbl DOE received for 2022 emergency SPR sales.

To date, DOE has directly purchased over 50 million bbl of oil for the SPR at an average price of about US$76/bbl. This is nearly US$20/bbl lower than the US$95/bbl average sales price for 2022’s emergency sales, meeting the administration’s commitment to secure a good deal for taxpayers. DOE will continue to evaluate options to refill the SPR while securing a good deal for taxpayers, considering planned exchange returns and market developments.

This follows his historic release from the SPR to address the significant global supply disruption caused by the war on Ukraine and help keep the domestic market well supplied, ultimately helping to bring down prices for American consumers and businesses. Analysis from the Department of the Treasury indicates that SPR releases in 2022, along with coordinated releases from international partners, reduced gasoline prices by as much as US¢40/gal.

Delivery to Bayou Choctaw will be 1.5 million bbl/month from February 2025 through May 2025. DOE has already secured cancellation of 140 million bbl of congressionally mandated sales scheduled for Fiscal Years 2024 through 2027. These cancellations have resulted in significant progress toward replenishment.

The SPR continues to be the world’s largest supply of emergency crude oil. The federally owned oil stocks are stored in underground salt caverns at four sites in Texas and Louisiana.

Read the article online at: https://www.tanksterminals.com/storage-tanks/02102024/us-department-of-energy-announces-new-solicitation-to-purchase-oil-for-strategic-petroleum-reserve/