US to add another 3.5 million bbls of crude to SPR
The US Department of Energy’s (DOE) Office of Petroleum Reserves announced two more tenders to buy up to 3.5 million bbls of crude oil to replenish its Strategic Petroleum Reserves (SPRs).
PHOTO: A depiction of oil barrels and a pipeline on the US flag. Getty Images
The energy department intends to buy another 3.5 million bbls of crude at an average price of $79/bbl or below. In July, it purchased up to 4.65 million bbls of crude oil for deliveries between October and December 2024.
The DoE announced two tenders for the purchase, one for 1.5 million bbls, which will be delivered at the Bayou Choctaw site in January 2025, and another for 2 million bbls, bound for delivery at the Bryan Mound site during the same time next year.
The two new tenders are in addition to the 9 million bbls already secured for purchase into the Big Hill storage facility this year, scheduled to be delivered between September and November.
The US energy department has so far purchased more than 43 million bbls of crude oil for the SPR at an average price of $77/bbl. The crude oil stocks are stored in underground salt caverns at four sites in Texas and Louisiana.
The SPR is one of the largest emergency crude oil reserves in the world. When the US purchases oil to fill its SPR, significant amounts of oil are removed from the market, which could potentially tighten supply and raise prices.
The SPRs stood at around 375 million bbls as of 26 July, according to US Energy Information Administration (EIA) data.
By Aparupa Mazumder
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