DOE Awards 13.4MM Barrels from SPR

Earlier this week, the U.S. Department of Energy (DOE) revealed that it had approved seven additional exchanges of a total of 13.4 million barrels of crude oil for release from the Strategic Petroleum Reserve (SPR).

The DOE highlighted that exchange contracts were awarded to the following companies:

• Shell Trading US Company (4.2 million barrels)
• Trafigura Trading LLC (three million barrels)
• Phillips 66 Company (2.3 million barrels)
• Macquarie Commodities Trading (two million barrels)
• Chevron U.S.A. Inc. (0.885 million barrels)
• ExxonMobil Oil Corporation (0.515 million barrels)
• BP Products North America (0.5 million barrels)

The DOE outlined that these releases fall under the authorization published in its announcement on November 23, 2021. In this announcement, the DOE noted that, at the direction of President Biden, U.S. Secretary of Energy Jennifer M. Granholm had authorized that 50 million barrels of crude oil from the SPR be made available.

This 50 million barrel SPR release will consist of a 32-million-barrel exchange solicitation and an 18 million barrel Congressionally-mandated sale that will conclude all sales under the authority of the Bipartisan Budget Act of 2018 during Fiscal Years 2022-2025, the DOE revealed back in November.

Combined, the DOE has provided nearly 40 million barrels of SPR crude oil to boost the nation’s fuel supply, including five previous exchanges, the organization said. This is the second-largest crude oil exchange in U.S. history, with the first being the 2000 Heating Oil Exchange, the DOE pointed out.

According to the DOE’s website, exchange contracts provide for a loan of crude oil to be repaid, in kind, within a certain date, with additional premium barrels, similar to interest. The SPR is described as the world’s largest supply of emergency crude oil. It is a U.S. government complex of four sites with deep underground storage caverns created in salt domes along the Texas and Louisiana Gulf Coasts. 

Investment in the facility to date has been about $25.7 billion, comprising $5 billion for facilities and $20.7 billion for crude oil, according to the DOE’s site, which highlights that the facility has an authorized storage capacity of 714 million barrels.

To contact the author, email andreas.exarheas@rigzone.com