DOE Announces 6,000,000 Barrels for Strategic Petroleum Reserve Resupply

These contracts follow the Request for Proposal that was a aria-label=”/articles/doe-announces/purchases/strategic-petroleumreserve” href=”https://www.energy.gov/articles/doeannounces/purchases/strategic_petroleum_reserve”>announced/a> on May 15, 2023. These contracts are in response to the Request for Proposal that was published on 15 May 2023. DOE announced that it would be purchasing approximately 3.1 millions additional barrels of crude to replenish the Big Hill Strategic Petroleum Reserve site in September. This announcement is part of the Biden-Harris administration’s three-part plan for replenishment.

The President’s strategy for replenishment is being advanced by today’s announcement, following his historic release of the SPR in response to the global supply disruptions caused by Putin’s war against Ukraine. The Department of the Treasury’s analysis shows that SPR releases, in conjunction with coordinated releases by international partners, resulted in a reduction of gasoline prices of up to 40 cents a gallon.

Ten companies submitted 30 proposals in response to the Request for Proposal. The purchase was fully subscribed and contracts were granted to 5 companies. The 3 million barrels will be purchased at an average cost of $73 per barrel. This is lower than the average SPR crude price of $95 per barrel in 2022. This means that taxpayers get a great deal. The crude oil is scheduled to be delivered at the Big Hill SPR Storage Site between August 1, 2023 and August 31, 2023.

The Administration’s replenishment strategy is divided into three parts: (1) Direct purchases using revenues from emergency sales, (2) Exchange returns with a premium based on volume delivered, and (3) Legislative solutions to avoid sales that are not related to disruptions in supply. DOE has already cancelled 140 million barrels of congressionally mandated sales for fiscal years 2024-2027. This cancellation has resulted in significant progress towards replenishment.

New Solicitation of Additional 3 Million Barrels of Crude Oil for Refilling the SPR

The DOE has also published a second Notice of Solicitation today to purchase 3 million barrels sour crude for the Strategic Petroleum Reserve at Big Hill SPR, with receipts planned for September 2023. The DOE must receive bids by 10:00 am Central Time, June 20, 2023. Successful bidders will receive contracts by June 30th 2023. This purchase is part of the Biden and Harris Administration’s three-part resupply plan. DOE will continue to pursue additional repurchases this year, as market conditions permit.

SPR remains the largest source of crude oil for emergency use in the world. The federally-owned oil stocks are kept in underground salt caverns in four locations in Texas and Louisiana. DOE prioritizes the SPR’s operational integrity through scheduled maintenance and the Life Extension 2 Program to ensure the SPR continues to fulfill its mission as an important energy security asset. SPR has been protecting the American economy and livelihoods during times of oil emergency for a long time.

Visit Infographic: Strategic Petroleum Reserve or Fact Sheet: Strategic Petroleum Reserve for more information.