The U.S. Department of Energy’s (DOE) Office of Petroleum Reserves announces solicitation to purchase up to 4.5 million barrels of U.S.-produced crude oil for the Strategic Petroleum Reserve (SPR).
Office of Cybersecurity, Energy Security, and Emergency Response
July 10, 2024
minute read time
New Solicitation for 4.5 Million Barrels Continues Biden-Harris Administration’s Commitment to Replenish Reserve at a Good Deal for American Taxpayers, Maintain the SPR’s Operational Readiness, and Protect the Nation’s Energy Security
WASHINGTON, D.C. — Today, the U.S. Department of Energy’s (DOE) Office of Petroleum Reserves announced a new solicitation for up to 4.5 million barrels of oil for delivery to the Strategic Petroleum Reserve’s Bayou Choctaw site from October through December. Building on the successful direct purchase strategy that has secured nearly 40 million barrels and the completion of the of Bayou Choctaw’s Life Extension 2 Project, this action is another step in DOE’s strategy to make consistent solicitations when oil prices are favorable for taxpayers. DOE continues to aim for $79 per barrel or less, significantly lower than the average of about $95 per barrel DOE received for 2022 emergency SPR sales. To date, DOE has purchased a total of 38.6 million barrels of oil for delivery to the Big Hill SPR site for an average price of $77 per barrel, as well as accelerated nearly 4 million barrels of exchange returns, pursuant to its strategy to refill 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.
Today’s announcement advances the President’s commitment to safeguard and replenish this critical energy security asset. This follows his historic release from the SPR to address the significant global supply disruption caused by Putin’s war on Ukraine and help keep the domestic market well supplied, ultimately helping to bring down prices for American consumers and businesses. Analysis from the Department of the Treasury indicates that SPR releases in 2022, along with coordinated releases from international partners, reduced gasoline prices by as much as 40 cents per gallon.
Bids for the solicitation will be due no later than 11:00 a.m. Central Time on July 18, 2024.
These solicitations are in addition to the 9 million barrels we have already secured for purchased into Big Hill for delivery during the same time period of September, October, and November.
The Administration’s ongoing three-part replenishment strategy to get the best deal for taxpayers while increasing SPR stocks includes: (1) Direct purchases with revenues from emergency sales; (2) Exchange returns that include a premium of oil above the volume delivered; and (3) Securing legislative solutions that avoid unnecessary sales unrelated to supply disruptions. DOE has already secured cancellation of 140 million barrels of congressionally mandated sales scheduled for Fiscal Years 2024 through 2027. These cancellations have resulted in significant progress toward replenishment.
The SPR continues to be the world’s largest supply of emergency crude oil. The federally owned oil stocks are stored in underground salt caverns at four sites in Texas and Louisiana. Through scheduled maintenance periods and the Life Extension 2 program, DOE continues to prioritize the operational integrity of the SPR to ensure that it can continue to meet its mission as a critical energy security asset. The SPR has a long history of protecting the economy and American livelihoods in times of emergency oil shortages.
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