US to Sell up to 6MM Barrels from Petroleum Reserve
The U.S. Department of Energy’s (DOE) Office of Fossil Energy revealed Thursday it plans to sell up to six million barrels of crude oil from the Strategic Petroleum Reserve (SPR).
The sale will be conducted with crude oil from the following three SPR sites:
- Up to three million barrels from Bryan Mound
- Up to 1.5 million barrels from Big Hill
- Up to 1.5 million barrels from West Hackberry
Contracts will be awarded to successful offerors no later than March 15, with deliveries taking place in April and May. Proceeds from the sale will be deposited into the DOE’s Energy Security and Infrastructure Modernization Fund during full year 2019.
The SPR 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. Although the reserve was established to cushion oil markets during energy disruptions, non-emergency sales of oil from the reserve can be authorized to respond to lesser supply disruptions or to raise revenues.
As of February 22, the total SPR inventory stood at 649.1 million barrels. Of this amount, 254.6 million barrels are made up of sweet crude and 394.5 million barrels are made up of sour crude. First oil was delivered to the SPR in 1977, with the shipment comprising 412,000 barrels of sweet crude. The SPR achieved its highest inventory to date in 2009, coming in at 726.6 million barrels.
Based in Washington, DC, the DOE’s mission is to “ensure America’s security and prosperity by addressing its energy, environmental and nuclear challenges through transformative science and technology solutions,” according to the organization’s website.
The department was formed in 1977 and traces its lineage to the various energy-related programs that previously had been dispersed throughout various Federal agencies.
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