The US Department of Energy June 9 said it has awarded contracts to purchase 3 million barrels of crude from five companies to begin refilling the Strategic Petroleum Reserve.
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Register Now"A total of 10 companies responded to the Request for Proposal submitting 30 proposals," the DOE said in a statement. "This purchase has been fully subscribed, and the contracts were awarded to five companies," the DOE said, without specifying the companies.
The barrels were bought at an average of $73/b, the DOE said, "lower than the average of about $95 per barrel the SPR crude was sold for in 2022."
"The crude oil will be delivered to the Big Hill SPR storage site from August 1, 2023, to August 31, 2023," the DOE said.
The purchase was part of the Biden administration's three-part SPR replenishment plan. In 2022, the Biden Administration released a record 180 million barrels of crude from the SPR in order to lower gasoline prices following Russia's invasion of Ukraine.
SPR inventories were at 353.6 million barrels the week ended June 2, having drawn an additional 18 million barrels since end-March as part of a congressionally mandated sale of 26 million barrels, with deliveries to be completed by the end of June.
The DOE also announced June 9 a solicitation to purchase another 3 million barrels of crude for delivery at the Big Hill site in September.
The deadline for bids is June 20 at 10 am CT, with contracts to be awarded by June 30.
"This purchase is in continuation of the Biden-Harris Administration's three-part replenishment plan and DOE will pursue additional repurchase opportunities this year as market conditions allow," the DOE said.