US opens bidding for 92.5 million- barrel SPR crude loan

The US Department of Energy's Office of Petroleum Reserves opened bidding April 30 for an emergency loan of up to 92.5 million barrels of crude oil from the Strategic Petroleum Reserve, the latest release under a coordinated International Energy Agency response to supply disruptions caused by the war with Iran.

The solicitation represents the fourth tender under a March agreement by the US to loan 172 million barrels as part of a broader IEA action targeting 400 million barrels across more than 30 member nations. Previous US tenders offered 126 million barrels, but drew uptake of less than 80 million barrels, or approximately 63% of volumes available, according to the DOE announcement.

"These actions help move oil quickly into the market, address short-term supply pressures, and ensure that the Strategic Petroleum Reserve remains strong through the return of premium barrels," Kyle Haustveit, DOE assistant secretary for the Hydrocarbons and Geothermal Energy Office, said in a statement.

The crude will originate from four SPR sites along the US Gulf Coast: Bayou Choctaw, Bryan Mound, Big Hill and West Hackberry. Companies must submit bids by 11 am CT May 4.

Platts, part of S&P Global Energy, assessed Mars, the benchmark US Gulf Coast medium sour grade, at a $2/b premium to cash WTI, $4.50/b weaker than its April 29 assessed value and $5/b weaker than its assessed value at the 10:30 am CST London close.

Market pressure

Global oil prices remained volatile April 30. At 1226 GMT, the June ICE Brent crude oil futures contract was down $3.88/b from the previous close at $118.03/b, while June NYMEX light sweet crude fell $2.27/b to $104.57/b, still up nearly 50% from Feb. 28.

Under the exchange mechanism, participating companies borrow SPR crude for immediate delivery to refiners and markets, with the obligation to return volumes plus additional premium barrels. The DOE said this structure stabilizes markets "at no cost to American taxpayers" while ultimately expanding reserve levels.

The SPR currently holds about 398 million barrels, equivalent to approximately four days of global oil consumption, according to the US Energy Information Administration. The reserve typically contains light sweet crude meeting NYMEX WTI specifications as well as medium and heavy sour grades.

In March, US Energy Secretary Chris Wright said SPR barrels would be released at a flow rate of 1 million-1.5 million b/d, and that the total IEA-coordinated releases should reach a rate of 3 million b/d.