The US Department of Energy announced Monday that it had secured 6 million barrels of crude oil for the Strategic Petroleum Reserve. Deliveries are scheduled to continue through May 2025.
This move is part and parcel of ongoing efforts to replenish SPR after an historic release of 180,000,000 barrels in 2022. Authorized by President Joe Biden, this release was made to address the soaring fuel costs following Russia’s invasion.
The recent oil purchase is part of the US government’s plan to stabilize fuel prices while enhancing national energy security.
The SPR is a key component in protecting the country against disruptions to energy supply.
Oil procurement breakdown
The 6 million barrels were purchased from three different suppliers: Exxon Mobil supplied 3.5 million barrels, Shell Trading Company provided 2 million barrels, and Macquarie Commodities Trading US provided 500,000 barrels.
The total cost of these acquisitions exceeded $411 Million.
The oil, which is classified as sour-crude–a type of crude that many US refineries can process–will arrive in Louisiana in several installments.
Delivery will begin in February 2025 and continue at a monthly rate of 1.5 million barrels, ending in May 2025.
Limitations on future SPR funding
The Department of Energy’s funds are limited and while this latest purchase boosts SPR’s stock it is still unable to make further purchases.
After these deliveries, the department only has enough money to purchase 2 million barrels of additional oil at $75 per barrel.
To continue replenishing the SPR beyond that, the department will need to request additional funding from Congress or seek approval to cancel planned congressionally-mandated sales.
In an earlier attempt to prioritize the refilling of the SPR, the Department successfully worked with Congress in order to cancel 140,000,000 barrels of mandatory sales scheduled for 2027.
The Department of Energy had originally planned to sell these oil barrels to raise money to fund government programs. However, their cancellation has allowed them to focus on strengthening strategic oil reserves in the face of ongoing geopolitical uncertainty.
This post US purchases 6,000,000 barrels of oil for rebuilding Strategic Petroleum Reserve first appeared on The ICD
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