New Solicitation for up to 3 million Barrels Continues Biden-Harris Administration’s Commitment to Replenish Reserve at a Good Deal for American Taxpayers, Maintain the SPR’s Operational Readiness, and Protect the Nation’s Energy Security
WASHINGTON, D.C. — Today, the U.S. Department of Energy’s (DOE) Office of Petroleum Reserves announced a solicitation for up to 3 million barrels of oil for delivery to the Strategic Petroleum Reserve (SPR) in March 2024. This is a continuation of DOE’s strategy of consistent solicitations aimed at purchasing oil when it can purchase at a good deal for taxpayers: a price of $79 dollars per barrel or below, far less than the average of about $95 per barrel DOE received for 2022 emergency SPR sales.
Today’s announcement advances the President’s commitment to safeguard and replenish this critical energy security asset. This follows his historic release from the SPR to address the significant global supply disruption caused by Putin’s war on Ukraine and help keep the domestic market well supplied, ultimately helping to bring down prices for American consumers and businesses. Analysis from the Department of the Treasury indicates that SPR releases last year, along with coordinated releases from international partners, reduced gasoline prices by as much as 40 cents per gallon.
Bids for the solicitation are due no later than 11:00 a.m. Central Time on December 18, 2023. The delivery will be received by the Big Hill storage facility. DOE will continue to release monthly solicitations for any available capacity through at least May 2024. By providing transparency in the cadence of solicitations and guidance on target pricing, qualified bidders can more easily submit comprehensive and competitive bids that deliver a good deal for taxpayers.
DOE has already purchased nearly 9 million barrels for SPR replenishment for an average of about $75 per barrel – far lower than the average of about $95 per barrel that SPR crude was sold for in 2022 – and secured nearly 4 million barrels in accelerated exchange returns.
The Administration’s ongoing three-part replenishment strategy to get the best deal for taxpayers while increasing SPR stocks includes: (1) Direct purchases with revenues from emergency sales; (2) Exchange returns that include a premium of oil above volume delivered; and (3) Securing legislative solutions that avoid unnecessary sales unrelated to supply disruptions. DOE has already secured cancellation of 140 million barrels in congressionally mandated sales scheduled for Fiscal Years 2024 through 2027. This cancellation has led to significant progress toward replenishment.
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 sites in Texas and Louisiana. Through scheduled maintenance periods and the Life Extension 2 program, DOE continues to prioritize the operational integrity of the SPR to ensure that the SPR can continue to meet its mission as a critical energy security asset. The SPR has a long history of protecting the economy and American livelihoods in times of emergency oil shortages.