The U.S. Department of Energy (DOE) has announced a new solicitation to purchase oil to replenish the Strategic Petroleum Reserve (SPR), according to a DOE press release.
The solicitation, announced by the DOE's Office of Petroleum Reserves, seeks up to 3.3 million barrels of crude oil for delivery to the SPR in October. The decision to initiate this purchase, according to the release, aligns with the DOE's strategy of acquiring oil at $79 per barrel or below.
To date, the DOE has procured a total of 32.3 million barrels of oil at an average price of $76.98, in addition to expediting nearly 4 million barrels of exchange returns.
Bids for the current solicitation are due by May 14, 2024, with delivery slated for the Big Hill storage facility. The DOE has also canceled 140 million barrels of congressionally mandated sales scheduled for Fiscal Years 2024 through 2027 in a move that it counts as replenishing the SPR.
The SPR plays a vital role in safeguarding the economy and livelihoods during oil shortages.
Just a week ago, President Biden's energy adviser Amos Hochstein said there was enough oil in the reserve and that the Administration would use crude oil from the SPR should the need arise.
"We have been replenishing into the SPR for the last several months. I think we have sufficient supply in the SPR to address any kind of concern in the economy if we need it," Hochstein said, speaking at the Milken Institute Global Conference last week.
The U.S. saw the stockpiles of crude oil in the SPR fall from 638 million barrels at President Joe Biden's inauguration to just 347 million barrels by the summer of 2023 as the Administration tried to bring down gasoline prices for consumers by releasing over 180 million barrels from the SPR.
By Julianne Geiger for Oilprice.com
Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More
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