The U.S. Department of Energy announced that it had finalized a contract to procure 4.65 million barrels of crude oil for the Strategic Petroleum Reserve. The oil will be delivered to the Bayou Choctaw site in Louisiana during the final three months of the year.
Oil suppliers and purchase price
Exxon Mobil will supply 3.9 million barrels of the contract, while Macquarie Commodities Trading U.S. LLC will provide the remaining amount. The average purchase price for the oil is approximately $76.92 per barrel, the DOE stated.
Repurchasing efforts, taxpayer benefits
This procurement is part of a series of contracts aimed at refilling the nation’s emergency oil stockpile, following a record release of 180 million barrels in 2022 to control soaring gasoline prices after Russia’s war of Ukraine. The DOE has since repurchased a total of 43.25 million barrels at an average price of around $77 per barrel, after having sold the oil at approximately $95 per barrel during the 2022 release, which the department considers a “good deal for taxpayers.”
Read more: Global gas demand forecast to grow 2.5 percent in 2024, driven by Asia: IEA
Cancellation of planned oil sale
The DOE has also worked with Congress to cancel a previously planned sale of 140 million barrels of oil from the reserve, a move the department says should contribute to the replenishment of the stockpile.
“As promised, we have secured the 180 million barrels back to the Strategic Petroleum Reserve released in response to Putin’s war in Ukraine – and we accomplished this while getting a good deal for taxpayers and maintaining the readiness of the world’s largest Strategic Petroleum Reserve,” said Energy Secretary Jennifer Granholm.
Continued oil purchases planned
The DOE expects to continue purchasing oil for the reserve into the next year, using the approximately $1.2 billion remaining in its revenue account. At current prices, this fund could cover the acquisition of around 15 million barrels.
The DOE has previously stated that it aims to buy oil at $79 per barrel or less.
Current strategic petroleum reserve levels
As of July 19, the SPR contained about 374.4 million barrels of oil, the highest level since the end of 2022, but still well below the typical 600-700 million barrels level of the past decade when the United States relied more heavily on imports.
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