US DOE sets SPR sale for Dec. 17, approves 4.8 million barrels to ExxonMobil

The US Department of Energy scheduled a Dec. 17 sale of 18 million barrels from the Strategic Petroleum Reserve and approved an exchange of 4.8 million barrels to ExxonMobil as part of the Biden administration's plan to tap into the SPR to help alleviate fuel prices, the DOE said Dec. 10.

The White House previously announced Nov. 23 that the US would release 50 million barrels from the SPR by early next year alongside releases from other major oil-consuming countries to help combat high prices at the pump and record inflation. That release includes an exchange of up to 32 million barrels that would be delivered in mid-December through April and returned in 2022-2024, in addition to 18 million barrels that were already required by Congress to be sold by the end of 2022.

The Dec. 10 announcement sets a quick date for the sale of the 18 million barrels, and reveals the first of multiple exchanges. Another 27.2 million barrels of SPR exchanges could still remain. However, since the November announcement, US Deputy Energy Secretary David Turk has said that the timing of SPR releases could be adjusted if oil prices fall and pain at the pump for US consumers begins to ease.

US Energy Secretary Jennifer Granholm said, "Exchanges and sales from the Strategic Petroleum Reserve are important tools we are using to address oil supply disruptions as the world recovers from a once-in-a-century pandemic. The president rightly believes Americans deserve relief now and has authorized the use of the SPR to respond to market imbalances and reduce costs for consumers."

Crude oil and fuel prices have dipped a bit in December largely from concerns about the COVID-19 omicron variant, although those fears have alleviated a bit. The SPR release news had some impact on prices in November, but the relatively modest size of the release -- and the much smaller releases from other countries -- did not move the markets much.

On Dec. 10, NYMEX January WTI settled 73 cents higher at $71.67/b, and ICE February Brent climbed 73 cents to $75.15/b.

The Energy Department said it approved the first ExxonMobil exchange for barrels from the Bryan Mound, Texas SPR storage site, as well as the Louisiana sites at West Hackberry and Bayou Choctaw.

DOE said exchange requests will continue to be accepted from interested parties and approved as appropriate to address supply disruptions.

The coordinated release with India, China, Japan, South Korea and the United Kingdom is the first of its kind. India has announced it would release 5 million barrels, and the UK said it would allow companies in the country to voluntarily release up to a combined 1.5 million barrels of private stocks.