The United States is continuing its plan to replenish its emergency oil reserve and protect its energy security. Its Department of Energy (DOE) announced on Tuesday the purchase of 3 million barrels of oil for delivery in March 2024 to enhance its Strategic Petroleum Reserve (SPR).
Oil purchase offers
The DOE’s Office of Petroleum Reserves explained that the purchase was made at an average price of $77.31 per barrel. This price is below the average of $95 a barrel that oil sold for in 2022.
According to the office’s statement, throughout this year the DOE purchased a total of 13.83 million barrels of oil for the strategic reserve at an average price of $75.63.
The statement added that 9 companies responded to the request for proposals, submitting 33 proposals. Moreover, 3 companies met the quality and specifications requirements, then, they submitted competitive bids. The crude will be delivered in March 2024.
The administration of U.S. President Joe Biden conducted sales last year, including record sales amounting to 180 million barrels. That was to help control oil prices after the Russian-Ukrainian war, hence, Russia is considered a major exporter of crude.
The U.S. has now bought about 14 million barrels to replenish its oil reserve after last year’s sales. About 4 million barrels of oil will also return to the Strategic Petroleum Reserve by February as oil companies return oil that had been loaned to them through a swap.
Read: Oil prices stabilize as market monitors Red Sea developments
Latest U.S. deals
The DOE stated on its website that in the latest deal, Sunoco Partners Marketing & Terminals sold about 1.2 million barrels to the strategic reserve. Whereas, Macquarie Commodities Trading US LLC and Phillips 66 sold about 900 thousand barrels each.
The DOE had already secured the cancellation of 140 million barrels in congressionally mandated sales from the SPR. It is set to take place from late this year through late 2026. The department said the cancellation “has led to significant progress toward replenishment.”
In addition, oil prices witnessed little change today, Wednesday, as investors monitored developments in the Red Sea. Some major shipping companies resumed transit through the region despite ongoing attacks and broader tensions in the Middle East.
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