The US Department of Energy (DOE) issued a request for proposals (RFP) Feb. 26 from companies willing to sell another 3 million bbl of US-sourced sour crude oil to inject into the Strategic Petroleum Reserve (SPR) in August.
DOE is looking to purchase crude for $79/bbl or below, less than the average $95/bbl DOE received when it sold emergency SPR crude in 2022 (OGJ Online, Apr. 22, 2022; Mar. 31, 2022; Oct. 19, 2023).
Replenishment "follows [President Biden's] 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," DOE said.
Bids for the latest solicitation are due no later than 11:00 a.m. Central Time on Mar. 6, 2024. Deliveries will flow into the Big Hill storage site in Texas.
DOE has already purchased a total of 23.08 million bbl for the SPR at an average price of $76.34, as well as accelerated nearly 4 million bbl of exchange returns.
DOE’s three-part SPR replenishment strategy includes direct purchases with revenues from emergency sales; exchange returns that include a premium to volume delivered; and securing legislative solutions that avoid unnecessary sales unrelated to supply disruptions. DOE said it has already secured the cancellation of 140 million bbl in congressionally mandated SPR sales scheduled for fiscal years 2024 through 2027.
