U.S. Department of Energy said last week it will discontinue purchases to replenish the nation’s strategic petroleum reserve even though the SPR is only about half full. DOE said the decision is based on increasing oil and gasoline prices. DOE was scheduled to purchase 3 million barrels for August delivery and another 3 million barrels for September delivery to the Bayou Choctaw SPR site in Louisiana.
DOE has purchased 32.3 million barrels at an average price of $76.98 per barrel. As of March 22, the four SPR sites in Texas and Louisiana held about 360.8 million barrels – well below the 600 million barrels in SPR before Russia invaded Ukraine. Authorized capacity is 714 million barrels.
The pause comes just days after DOE awarded contracts to Atlantic Trading & Marketing, Macquarie Commodities, and Sunoco Partners Marketing & Terminals to deliver crude to the Big Hill SPR site in Jefferson County in southeast Texas.