The Biden administration has announced the purchase of an additional six million barrels of crude oil for the Strategic Petroleum Reserve (SPR), capitalizing on a recent dip in oil prices to bolster the nation’s emergency stockpile.
The U.S. Department of Energy (DOE) revealed on Friday two solicitations for the SPR, totaling 1.5 million barrels for delivery in September and an additional 4.5 million barrels scheduled for October, November, and December. These purchases will be directed to the Bayou Choctaw site, which has recently completed maintenance and is now prepared to receive new supplies. Bids for these solicitations are due later this month.
This move is part of a broader effort by the DOE to gradually replenish the SPR, which stands as the world’s largest emergency crude oil reserve. To date, the DOE has acquired approximately 38.6 million barrels for delivery to a separate reserve site. The SPR, which has a capacity exceeding 700 million barrels, had been drawn down to a 40-year low following the Biden administration’s unprecedented release of 180 million barrels in response to the supply disruptions triggered by Russia’s invasion of Ukraine.
As of now, the SPR holds roughly 370.2 million barrels, a significant decrease from nearly 600 million barrels at the beginning of 2022. The recent purchases are part of a strategic effort to rebuild the reserve, ensuring energy security for the nation.
The DOE’s decision comes as oil prices have experienced a notable decline, falling 13% since early April. As of 1:15pm ET, WTI crude was trading at $75.61 per barrel. The average price for the DOE’s recent purchases has been $77 per barrel, highlighting the administration’s aim to secure favorable deals amid fluctuating market conditions.
In a statement, the DOE emphasized its commitment to prudent management of the SPR: “DOE will continue to evaluate options to refill the SPR while securing a good deal for taxpayers, taking into account planned exchange returns and market developments.”
