WASHINGTON, D.C.— Today, the U.S. Department of Energy’s (DOE) Office of Petroleum Reserves announced a Notice of Sale to meet its obligation to Congress to sell 26 million barrels of crude oil from the Strategic Petroleum Reserve (SPR) in Fiscal Year 2023. This sale will fulfill the congressional mandate set forth in section 403 of the Bipartisan Budget Act of 2015 and section 32204 of the Fixing America’s Surface Transportation Act. The deliveries will take place from April 1 through June 30.
In accordance with the laws, DOE will release up to 26 million barrels of sweet crude oil from two SPR storage sites, with deliveries beginning as early as April 1, 2023. DOE must receive bids for this notice no later than 10:00 a.m. Central Time on February 28, 2023. Contracts will be awarded to successful offerors no later than March 8, 2023.
Crude oil sold from the SPR for this sale will come from the following two SPR storage sites:
- Up to 6 million barrels from Big Hill
- Up to 20 million barrels from West Hackberry
The SPR is 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.
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. Already a DOE proposal to Congress was included in the December 2022 Omnibus that led to the canceling of Congressional mandated sales equivalent to 140 million barrels that were set to take place between FY24 - FY27. This action will not only maintain volume but also ensure the best value for taxpayers at approximately $74 a barrel that avoids unnecessary releases to the market when there is not a supply disruption.
Any company registered in the SPR’s Crude Oil Sales Offer Program is eligible to participate in this and other SPR crude oil sales. Other interested companies may register through the SPR’s website: Crude Oil Sales Offer Program.