The U.S. Department of Energy on Tuesday said it was selling up to 45 million barrels of oil from the Strategic Petroleum Reserve as part of the Biden administration’s previously announced, largest-ever release from the stockpile.
Deliveries of crude from the SPR sale would take place from Aug. 16 through Sept. 30, the Energy Department said.
The Biden administration said in late March it would release a record 1 million barrels of oil per day of oil for six months from the SPR, held in a series hollowed-out salt caverns on the coasts of Louisiana and Texas.
The release was meant to help control oil prices that spiked after Russia, one of the world’s top petroleum producers, invaded Ukraine and as the West imposes sanctions on Moscow.
Prices for global benchmark Brent crude have marched higher since the March 31 announcement to trade above $120 a barrel. The rise has come as few global oil producers have spare capacity while consumers emerging from the pandemic drive fuel demand.
Biden administration officials have said the oil price could be higher if the SPR had not been tapped. But the release has also driven the level of the reserve to the lowest point since 1987, adding to worries about tight global oil markets despite the United States having more in the stockpile than required under international agreements.
Oil contracts from a previous SPR sale announced on May 24 were awarded to nine companies, including Valero, Exxon Mobil and Marathon Petroleum, the Energy Department said.