U.S. Department of Energy said Monday it will purchase 1.2 million barrels of oil to help replenish the nation’s strategic petroleum reserve. The purchases will be made at an average price of $77.57 per barrel from two companies after 18 bids were submitted.
Reuters reported, “The administration of President Joe Biden last year conducted the largest ever sale from the SPR of 180 million barrels – part of a strategy to stabilize soaring oil markets and combat high (gasoline) pump prices in the aftermath of Russia’s invasion of Ukraine… As oil prices have risen on production cutbacks by Saudi Arabia and Russia, it has been difficult for the administration to buy back oil for the reserve.”
DOE plans initial oil purchases for delivery in December and January to the SPR storage site at Big Hill in Jefferson County in southeast Texas – one of four SPR underground salt caverns for storage along the Texas and Louisiana coasts. DOE said additional solicitations for oil purchases will be made until at least May 2024.