U.S. Purchases Oil for Strategic Petroleum Reserve

Date: Monday, October 23, 2023
Source: Reuters

The U.S. has acquired 6 million barrels of oil for the Strategic Petroleum Reserve (SPR) for delivery through May 2025, as announced by the Department of Energy.

This initiative aims to replenish stockpiles after President Joe Biden sanctioned the largest-ever sale from the reserve in 2022, involving 180 million barrels. This move was part of a strategy to manage fuel prices in response to Russia’s invasion of Ukraine.

The purchase includes:
– 3.5 million barrels from Exxon Mobil
– 2 million barrels from Shell Trading Company
– 500,000 barrels from Macquarie Commodities Trading US

The total expenditure exceeded $411 million. The purchased sour crude, suitable for many U.S. refineries, will be delivered at a rate of 1.5 million barrels per month from February to May 2024 to the Bayou Choctaw site in Louisiana.

Looking ahead, the department has sufficient funding for an additional 2 million barrels at approximately $75 per barrel. However, to continue filling the SPR beyond that, they will need to request more funds from Congress or seek to cancel upcoming mandated sales. The department had previously worked with Congress nearly two years prior to cancel 140 million barrels of mandated sales through 2027 to secure funds for government programs.