The US Department of Energy’s (DOE) Office of Petroleum Reserves has signed contracts to acquire 3.3 million bbl of US-produced crude oil for the Strategic Petroleum Reserve (SPR).
The barrels are being purchased for an average price of $79.38/bbl, below the average of about $95/bbl that SPR crude was sold for in 2022, the DOE noted in a release May 17.
Earlier this month, the DOE said it was resuming SPR purchases, with new deliveries beginning in October (OGJ Online, May 7, 2024).
Additionally, DOE will release a solicitation to purchase 3 million bbl of oil for delivery to the Big Hill site in November.
To date, DOE has purchased a total of 35.6 million bbl of oil for the SPR for an average price of $77.18/bbl as well as accelerated nearly 4 million bbl of exchange returns, pursuant to its strategy to refill the SPR after the Biden administration’s 180 million bbl SPR withdrawal in 2022 to curb oil and gasoline prices following Russia’s invasion of Ukraine (OGJ Online, Mar. 31, 2022).
A total of 7 companies responded to the government’s Request for Proposal (RFP), submitting 22 proposals, and the contracts were awarded to 4 companies that met quality and spec requirements, in addition to providing competitive bids. The crude oil will be delivered to the Big Hill SPR storage site from Oct. 1-Oct. 31, 2024.
