The U.S. awarded contracts for the purchase of 3.3 million barrels of oil to help replenish the Strategic Petroleum Reserve (SPR) after a massive sale from the stockpile in 2022, the Department of Energy said on Friday.
The oil is being bought at an average price of $79.38, the department said. The administration of President Joe Biden sold 180 million barrels of SPR oil in 2022 in an effort to control gasoline prices that had risen after Russia’s full-scale invasion of Ukraine.
The United States created the SPR after the Arab oil embargo in 1975 spiked gasoline prices and damaged the U.S. economy. Presidents have tapped the SPR, the world’s largest oil reserve, to calm petroleum markets during times of war or when hurricanes hit energy infrastructure along the U.S. Gulf of Mexico.
The energy department also said it is seeking to buy another 3 million barrels for delivery in November.
The agency has so far bought back only 35.6 million barrels of the 180 million barrels.
The Biden administration says it wants to buy back SPR oil at about $79.99 a barrel. Buying oil back at that price could be difficult with the approach of peak U.S. summer driving season, a time that traditionally boosts oil demand.
West Texas Intermediate oil prices settled above $80 a barrel on Friday as economic indicators from the world’s top two oil consumers, China and the United States, raising hopes for higher demand.
(Reporting by Timothy Gardner and David Ljunggren; Editing by Bill Berkrot)