U.S. buys 2.5M barrels to restore strategic oil reserve

8/25/2024 5:55:28 AM

(MENAFN) The U.S. Department of energy has announced a major acquisition of nearly 2.5 million barrels of oil to replenish the Strategic petroleum Reserve (SPR), following the largest release from the reserve in 2022. This purchase is part of a broader effort to restock the reserve, which was significantly depleted after the Biden administration's decision to release 180 million barrels to stabilize gasoline prices during the Russia-Ukraine conflict. The new oil shipment will include approximately 800,000 barrels of high-sulfur crude oil per month, scheduled for delivery to the Bryan Mound site in Texas from January through March of the coming year.

The contract for this procurement, valued at over USD180.3 million, has been awarded to Macquarie Commodities Trading. The Department of Energy had previously announced plans to purchase up to 6 million barrels, with an initial monthly purchase rate of 2 million barrels. While the department has not specified whether it will complete the remaining 3.5 million barrels within the designated timeframe, efforts to replenish the SPR are already in progress. To date, the administration has repurchased over 47 million barrels at an average cost of USD76.89 per barrel, which is about USD18 less than the average price of USD95 per barrel at which the oil was sold in 2022.

This replenishment effort highlights the U.S. government's commitment to restoring the SPR to its pre-release levels. The strategic reserve plays a crucial role in ensuring energy security and mitigating potential disruptions in the oil supply chain. As the administration continues to navigate the complexities of global energy markets, these actions reflect a strategic approach to managing the nation's oil reserves effectively.

MENAFN25082024000045015682ID1108598000

Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.