US Plans to Buy Up to 4.5 Million Barrels of Oil for Strategic Petroleum Reserve

By Jace Dela Cruz

Jul 11, 2024 11:52 AM EDT

The US Energy Department announced Wednesday its intention to purchase up to 4.5 million barrels of oil to replenish the Strategic Petroleum Reserve (SPR).

US Plans to Buy 4.5 Million Barrels of Oil for Strategic Petroleum Reserve

According to Reuters, this move follows a major sale of 180 million barrels from the SPR in 2022, directed by President Joe Biden in response to Russia's invasion of Ukraine.

The solicitation aims to refill the SPR's Bayou Choctaw site in Louisiana, with deliveries scheduled between October and December. Oil companies must submit bids by July 18.

EPA Proposes More Stringent Emissions Standards For Non-road Diesels — LOS ANGELES - MAY 11: Tugboats escort the oil tanker MCT Arcturus from the terminal, where petroleum storage tanks are seen in the background, and out of the Port of Los Angeles May 11, 2004 in Los Angeles, California
(Photo : David McNew/Getty Images)

Target Price Per Barrel

Despite the current higher oil prices, the Energy Department maintains a target price of $79 per barrel for these purchases, significantly lower than the $82.10 per barrel price of West Texas Intermediate benchmark oil.

The department has already repurchased approximately 38.6 million barrels of oil following the 2022 sale. Additionally, it has collaborated with Congress to cancel further sales from the reserve that both political parties had authorized.