US DOE Awards Final Contracts under SPR Replenishment Program

The United States Department of Energy (DOE) has contracted two companies to deliver 2.4 million barrels of crude for the Strategic Petroleum Reserve (SPR) at an aggregate price of $178.65 million, making the final awards for the reinjection campaign to compensate war-induced withdrawals.

The Biden administration had already completed the replenishment of 180 million barrels that had been withdrawn 2022 from the emergency reserve. Contracts to complete that volume were awarded July 29.

Including the latest and final awards, the replenishment program is set to exceed the 2022 sales from the SPR by 20 million barrels, the DOE said in a statement.

Purchases under the replenishment program were made “at a good deal for taxpayers”, the DOE said, reporting an average buying price of $74.75 per barrel.

“To date, DOE has directly purchased 59 million barrels of oil for the SPR at an average price of under $76 per barrel”, the online statement said. “This is about $20 per barrel lower than the $95 average sales price for 2022’s emergency sales”.

The DOE also canceled 140 million barrels in Congress-ordered sales for fiscal years 2024–2026 at about $74 a barrel.

“Together, this brings the total oil purchased or retained in the Strategic Petroleum Reserve since 2022 to nearly 200 million barrels”, the department said.

“All $16.95B in emergency revenue made from the 2022 sale was used to secure these barrels, except for the $2.05B that was rescinded by Congress for deficit offset”, the DOE said.

“Additionally, DOE accelerated approximately 5 million barrels in exchange returns, to further support the SPR refill and ensure all available windows for efficient replenishment were taken advantage of – helping to increase volumes in preparation for future emergency needs for replenishment”.

President Joe Biden announced March 31, 2022, an SPR draw-out of one million barrels a day for six months, totaling 180 million barrels. The release aimed to hold down fuel prices amid concerns that Russia’s invasion of Ukraine was disrupting global supply.

SPR releases and coordinated releases with countries in the International Energy Agency lowered gasoline prices by 17-42 cents, according to an analysis by the Treasury Department published July 26, 2023.

The latest and final awards went to Macquarie Commodities Trading US LLC, which will deliver 1.8 million barrels, and Energy Transfer Crude Marketing LLC, which will deliver 600,000 barrels.

“With the awarding of these contracts, DOE has fully utilized all funding allocated for crude oil purchases following the sale of 180 million barrels in response to the Russian invasion of Ukraine and secured 20 million more barrels at a good price for taxpayers”, Energy Secretary Jennifer M. Granholm said. “This milestone cements President Biden and Vice President Harris' commitment of putting the economic and energy security of the American people first with actions that steadied prices at the pump, provided certainty to industry, and maintained the SPR as the world’s largest supply of emergency crude oil”.

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