Monday, July 15, 2024

The US Energy Department Seeks 4.5 Million Barrels of Oil for Strategic Petroleum Reserve

Heading: US Department of Energy seeks up to 4.5 million barrels of oil for Strategic Petroleum Reserve (SPR) replenishment

Title: US Energy Department Seeks 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 comes as part of the DOE’s plan to replenish the SPR and bring down prices for American consumers and businesses.

In addition to seeking new oil supplies, the department is also organizing the return of nearly 4 million barrels of exchanged oil as part of its effort to restock the emergency reserve. US Energy Secretary Jennifer Granholm had previously mentioned the department’s intention to rapidly replenish the SPR this year.

This action follows US President Joe Biden’s authorization for the sale of 180 million barrels from the emergency reserve in 2022, the largest sale ever, in response to the Russian invasion of Ukraine. The DOE aims to purchase oil for the SPR at $79 per barrel or less, significantly lower than the average price of $95 per barrel received for emergency sales in 2022.

However, despite the department’s target price, the current market price of oil stands at $82.10 per barrel, driven by increased refining activity in the US during the peak summer driving season. The DOE continues to monitor market conditions and aims to secure favorable deals for taxpayers while refilling the SPR.

The SPR, which holds the world’s largest emergency crude oil supply, is stored in underground salt caverns at four sites along the Gulf of Mexico coastline. The DOE’s strategy includes making timely bids for oil purchases and considering potential exchange returns to maximize the reserve’s capacity.

Interested parties have until July 18, 2024, to submit bids for the DOE’s solicitation. The department remains committed to maintaining the SPR’s readiness to mitigate disruptions in petroleum supply and ensure energy security for the nation.

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