The U.S. Department of Energy announced on Monday that it has finalized a contract to buy 4.65 million barrels of crude oil for the Strategic Petroleum Reserve, with delivery scheduled for the Bayou Choctaw site in Louisiana during the final quarter of the year.
Exxon Mobil will provide 3.9 million barrels under this contract, and Macquarie Commodities Trading US LLC will supply the remaining amount, according to the DOE. The average cost per barrel is approximately $76.92.
This acquisition is part of a series of contracts aimed at replenishing the nation's emergency oil stockpiles after a historic release of 180 million barrels in 2022. That release was intended to stabilize soaring gasoline prices, which exceeded $5.00 per gallon following President Vladimir Putin's directive for Russia's invasion of Ukraine. However, it also depleted the reserves to their lowest level in four decades.
Since then, the DOE has repurchased 43.25 million barrels at an average price of about $77 per barrel, having previously sold them at around $95 per barrel during the 2022 release, which it deemed a "good deal for taxpayers." U.S. crude futures were trading at approximately $76 per barrel on Monday.
The DOE has collaborated with Congress to halt a previously planned sale of 140 million barrels from the reserve, which the department believes contributes to the stockpile's refilling. Energy Secretary Jennifer Granholm stated, "As promised, we have secured the 180 million barrels back to the Strategic Petroleum Reserve released in response to Putin’s war in Ukraine – and we accomplished this while getting a good deal for taxpayers and maintaining the readiness of the world’s largest Strategic Petroleum Reserve."
The DOE anticipates continuing to purchase oil for the reserve into next year, utilizing the approximately $1.2 billion remaining in its revenue account. At current prices, this fund could facilitate the purchase of around 15 million barrels. The DOE has previously indicated its intention to buy oil at $79 per barrel or less.
As of July 19, the SPR held about 374.4 million barrels of oil, the highest level since the end of 2022, but significantly below the typical range of 600-700 million barrels observed over the last decade when the U.S. was more dependent on oil imports.
