WASHINGTON, D.C.- Today, following the finalization of contracts for the most recent solicitation of crude oil for the Strategic Petroleum Reserve (SPR), the U.S. Department of Energy confirms that more than 40 million barrels have been purchased and delivered or secured for delivery by December 2024. On top of the 140 million barrels of oil secured by working with Congress to cancel previously-mandated sales, this brings the total purchased or kept in the SPR since 2022 to 180 million barrels – the full amount sold following the unprecedented Russian war against Ukraine.
By improving procurement practices and providing consistency in repurchasing process for industry, DOE has been able to take advantage of windows of market stability to directly purchased a total of 43.25 million barrels of oil for the SPR for an average price of $77. This is nearly $20 per barrel lower than the $95 average sales price for 2022’s emergency sales, meeting the Administration’s commitment to secure a good deal for taxpayers. DOE has also successfully accelerated nearly 5.5 million barrels in exchange returns initially slated for the summer of 2024 to maximize SPR refill. DOE will continue to evaluate options to refill the SPR even more with the remaining proceeds from the 2022 emergency sales while securing a good deal for taxpayers, taking into account planned exchange returns and market developments.
“From the beginning, this administration has put the economic and energy security of the American people first. This milestone is a proof point that when the Biden-Harris Administration makes and implements a plan, we deliver for the American people,” said U.S. Secretary of Energy Jennifer M. Granholm. “As promised, we have secured the 180 million barrels back to the Strategic Petroleum Reserve released in response to Putin’s war in Ukraine – and we accomplished this while getting a good deal for taxpayers and maintaining the readiness of the world’s largest Strategic Petroleum Reserve.”
This milestone underscores the Biden-Harris Administration’s commitment to safeguard and replenish this critical energy security asset. This follows the 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 last year, along with coordinated releases from international partners, reduced gasoline prices by as much as 40 cents per gallon.
DOE’s Office of Petroleum Reserves also announced that contracts have been awarded for the acquisition of 4.65 million barrels of U.S.-produced crude oil for the Strategic Petroleum Reserve (SPR). The contracts today represent a fully subscribed solicitation following the Request for Proposal (RFP) that was on July 10, 2024.
A total of 5 companies responded to the RFP, submitting 42 proposals, and the contracts were awarded to 2 companies that met quality and spec requirements, in addition to providing competitive bids. The crude oil will be delivered to the Bayou Choctaw SPR storage site from October 1, 2024, through December 31, 2024.
The Administration’s ongoing three-part replenishment strategy to get the best deal for taxpayers while increasing SPR stocks included: (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. 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.