US to release another batch of crude from SPR
The US Department of Energy (DOE) has issued a Request for Proposal (RFP) for an exchange of up to 40 million bbls of crude oil from its Strategic Petroleum Reserves (SPR).
IMAGE: Crude oil storage tanks. Getty Images
The move continues the DOE’s rollout of the US’ 172 million-bbl contribution to the International Energy Agency’s (IEA) coordinated 400 million-bbl release by 32 member countries, in a bid to stabilise global oil supplies amid the Middle East conflict.
The crude oil will originate from the SPR’s Big Hill and Bryan Mound sites, the DOE said. The latest SPR action builds on five previous emergency exchange RFPs of about 133 million bbls.
The move is expected to ensure the SPR grows beyond current levels, while delivering immediate supply to refiners and the global oil market, according to the DOE. Bids for the solicitation will end before 6 October, the DOE said.
“Under DOE’s exchange authority, participating companies will return the 40 million borrowed barrels with additional premium barrels,” the US agency added.
Separately in May, the DOE released about 53.3 million bbls of crude oil from its Bayou Choctaw, Bryan Mound, Big Hill and West Hackberry sites to nine oil companies including BP, ExxonMobil, Marathon Petroleum and Phillips 66.
The US SPR fell to 284.6 million bbls in the week ending 18 September. This marked its lowest level since 1982, according to the US Energy Information Administration (EIA).
That is down from 285 million bbls the prior week and from 406 million bbls a year earlier.
The SPR fell below 300 million bbls in early August for the first time since 1983, and has hit a new low every week since.
US law bars the DOE from using one of its emergency drawdown powers to take the SPR below 252.4 million bbls.
Once the SPR falls below 300 million bbls, it can no longer pump oil out at emergency speeds, and its practical operating floor is around 250 million bbls, Texas A&M University professor Siddharth Misra wrote in Fortune in August.
By Aparupa Mazumder
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