The U.S. issued two solicitations on Friday to buy a total of 6 million barrels of crude oil for the Strategic Petroleum Reserve as the administration of President Joe Biden replenishes the stockpile following a historic sale in 2022.
The Department of Energy said the oil is for delivery to the SPR’s Bayou Choctaw site in Louisiana from September through December.
The department this year moved to a direct purchase strategy of oil for the reserve instead of basing the purchasing price on an index of prices. It said that move and the completion of maintenance at Bayou Choctaw has helped it buy 38.6 million barrels of oil for at an average of $77 per barrel.
The Biden administration in 2022 announced a record sale of 180 million barrels from the SPR after Russia’s invasion of Ukraine. The move was an effort to control gasoline prices that spiked to more than $5.00 a gallon after the invasion. But it also pushed down the level of the SPR to the lowest in 40 years.
Energy Secretary Jennifer Granholm said in an exclusive interview on Tuesday that the department could speed replenishment of the SPR this year, beyond a roughly 3 million barrel per month pace.
“It could pick up more than that,” Granholm told Reuters in Washington. She said two of the SPR’s four sites on the coasts of Texas and Louisiana have been in maintenance, slowing purchases.
“All four sites will be back up by the end of the year, so one could imagine that pace would pick up, depending on the market,” Granholm said.
The DOE wants to buy back oil for the reserve at about $79 a barrel. West Texas Intermediate crude futures were well below that at about $75 on Friday and was set for a third straight weekly loss on concerns about demand.
(Reporting by Timothy Gardner Editing by Marguerita Choy)