Washington, D.C. – Today, the U.S. Department of Energy’s (DOE) Office of Petroleum Reserves announced that contracts have been awarded for the purchase of crude oil from the Strategic Petroleum Reserve (SPR) to meet its Congressional obligation to sell 26 million barrels in Fiscal Year 2023. The awards follow the Notice of Sale announced on February 13, 2023. These contract awards complete the mandated sale set forth in section 403 of the Bipartisan Budget Act of 2015 and section 32204 of the Fixing America’s Surface Transportation Act.
A total of eleven (11) companies responded to the notice, submitting 119 bids. The SPR plans to sell crude oil from two of the four SPR storage sites – Big Hill and West Hackberry. This sale is fully subscribed, and the contracts were awarded to the following six companies:
- Marathon Petroleum Supply and Trading LLC 8.4 million barrels
- Equinor Marketing & Trading 7.3 million barrels
- Shell Trading (US) Company 3.6 million barrels
- Aramco Trading Americas LLC 3.5 million barrels
- Macquarie Commodities Trading US LLC 1.6 million barrels
- Phillips 66 Company 1.6 million barrels
Crude oil deliveries will take place from each of two SPR storage sites from April 1, 2023 to June 30, 2023.
This sale will fulfill the congressional mandate, with all 26 million barrels having been sold. Proceeds of the sale will be deposited in the U.S. Treasury by the end of this fiscal year.
This will be the last Congressionally mandated sale until FY26. Congress accepted a DOE proposal that canceled 140 million barrels in congressionally mandated sales that were directed to take place between FY24 – FY27. This action strategically maintains volume SPR at a price of ~$74 dollars a barrel by avoiding unnecessary sales.
The Administration is focused on replenishing the SPR in a way that provides the best deal for taxpayers by aiming to repurchase crude at a lower price than it was sold for, while providing certainty to the industry in a way that helps encourage near-term production. DOE continues to prioritize operational integrity of the SPR so it can continue to meet its mission as a critical energy security and supply tool.
As part of its long-term replenishment approach, following emergency releases in 2022 following Putin’s invasion of Ukraine, DOE is implementing a three-part strategy that includes: (1) Direct repurchases with revenues from emergency sales; (2) Exchange returns that include a premium to volume delivered; and (3) securing legislative solutions that avoid unnecessary sales unrelated to supply disruptions to strategically maintain volume. The SPR continues to be the world’s largest supply of emergency crude oil, and the federally owned oil stocks are stored in underground salt caverns at four storage sites in Texas and Louisiana. The SPR has a long history of protecting the economy and American livelihoods in times of emergency oil shortages. However, this action is specific to meeting its sale requirements to Congress.