The U.S. Department of Energy (DOE) announced that contracts have been awarded for the purchase of crude oil from the Strategic Petroleum Reserve (SPR) following a Notice of Sale announced on October 18, 2022.
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These contract awards complete the President Biden’s announcement on March 31, 2022, to release 180 million barrels of crude oil to address the significant global supply disruption caused by Putin’s war on Ukraine, act as a wartime bridge for domestic production to increase, and aid in lowering energy costs for American families.
The drawdowns have been a stabilizing force in the volatile energy market, and a recent analysis from the Department of the Treasury estimates that SPR releases this year, along with coordinated releases from international partners, have reduced gasoline prices by up to about 40 cents per gallon compared to what they would have been absent these drawdowns.
With these sales, this historic release of SPR crude will have provided approximately 180 million barrels of crude oil supply to the U.S. economy—resulting in certainty of supply for American businesses and consumers.
A total of twelve (12) companies responded to the notice, submitting 110 bids. The SPR plans to sell crude oil from three of the four SPR storage sites – West Hackberry, Big Hill and Bryan Mound.
This sale is fully subscribed, and the contracts were awarded to the following companies:
• Equinor Marketing & Trading - 1.750 million barrels
• Macquarie Commodities Trading US LLC - 1.850 million barrels
• Marathon Petroleum Supply and Trading LLC - 2.950 million barrels
• Phillips 66 Company - 0.350 million barrels
• Shell Trading (US) Company - 0.700 million barrels
• Valero Marketing and Supply Company - 7.450 million barrels
Crude oil deliveries will take place from each of the three SPR storage sites from December 1, 2022 to December 31, 2022.
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. ■