The U.S. Department of Energy on Wednesday said it will not award oil supply contracts for Louisiana’s Bayou Choctaw Strategic Petroleum Reserve (SPR) site in August and September due to high oil prices.
“We monitor market dynamics to remain nimble and innovative in our successful replenishment approach to protect this critical national security asset,” said DOE spokesperson Charisma Troiano.
The United States had been seeking to buy 3 million barrels of oil for the SPR, as one of the country’s four storage sites winds down maintenance that had tempered the pace of replenishing the stockpile.
The Energy Department has previously said it aims to purchase oil for the SPR at a price of $79 per barrel or below, less than the average of about $95 it received for 2022 emergency SPR sales.
The Energy Department said it will continue to solicit available capacity as market conditions allow.
Last month, the agency had issued two solicitations of 3 million barrels for the Bayou Choctaw site that has undergone maintenance this year.
Life extension maintenance at the Bayou Choctaw and Bryan Mound, Texas sites this year had slowed the replenishment of the SPR after President Joe Biden’s administration had conducted the largest-ever sale of 180 million barrels from the SPR in 2022. That sale was an effort to lower oil prices after Russia invaded Ukraine.
(Reporting by Richard Valdmanis; writing by Susan Heavey and Valerie Volcovici; Editing by Doina Chiacu and Chizu Nomiyama)