The U.S. Department of Energy (DOE) announced the completion of a contract for the purchase of 4.65 million barrels of crude oil for the Strategic Petroleum Reserve (SPR). This procurement will take place in the last quarter of the year and the oil will be delivered to the Bayou Choctaw site in Louisiana.
According to the Department of Energy, Exxon Mobil will be responsible for supplying 3.9 million barrels, while the remaining will be provided by Macquarie Commodities Trading US LLC. The average purchase price stands at approximately $76.92 per barrel.
Oil replenishment: DOE acquires new reserves
This purchase represents the latest in a series of contracts aimed at replenishing oil reserves. the country’s emergency oil reserves reserves, which had been significantly depleted following a historic release of 180 million barrels in 2022. This release was implemented to control the high prices of gasoline. gasolinewhich had exceeded $5 per gallon following the Russian invasion of Ukraine ordered by President Vladimir Putin. However, this measure left reserves at their lowest level in 40 years.
Since then, the Department of Energy has managed to buy back 43.25 million barrels at an average price of around $77 per barrel. This buyback came after selling oil at about $95 per barrel during the 2022 release, which the Department of Energy considers a “good deal for taxpayers.” U.S. crude oil prices were trading around $76 per barrel on Monday.
Forthcoming DOE purchase of 15 million barrels
In another development, DOE has worked with Congress to cancel a planned sale of 140 million barrels of oil from the reserve, which the department believes will help replenish the stockpile. Energy Secretary Jennifer Granholm said, “As promised, we have ensured that the 180 million barrels will return to the SPR released in response to Putin’s war in Ukraine, while achieving a good deal for taxpayers and maintaining the availability of the world’s largest SPR.”
Looking ahead, the Department of Energy plans to continue purchasing oil for the reserve next year, using the approximately $1.2 billion remaining in its revenue account, Reuters reports.Reuters reports. At current prices, this fund could cover purchases of around 15 million barrels.
The Department of Energy has indicated that its goal is to purchase oil at or below $79 per barrel. As of July 19, the SPR contained approximately 374.4 million barrels, the highest level since late 2022, although still below the typical range of 600 to 700 million barrels of the last decade, when the United States relied more on imports.
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Source: energynow
Photo: Shutterstock
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