Biden administration to purchase 6 MMbbl of oil for Strategic Petroleum Reserve as prices drop

(Bloomberg) – The Biden administration is buying six million more barrels for the nation’s oil reserve as it continues to take advantage of a dip in prices to refill the depleted cache.

The Energy Department announced Friday two solicitations for the Strategic Petroleum Reserve - 1.5 MMbbl for delivery in September and an additional 4.5 MMbbl for October, November, and December. The bids, which are due later this month, will be for the reserve’s Bayou Choctaw site, which previously had been off line for maintenance.

The department has already purchased some 38.6 MMbbl of oil for delivery to a separate reserve site as it slowly refills the more than 700 MMbbl-strong cache. The reserve, the world’s largest, reached a 40-year low following the administration’s unprecedented drawdown of a record 180 MMbbl in the wake of Russia’s invasion of Ukraine. It currently holds about 370 MMbbl, according to Energy Department data, down from almost 600 MMbbl at the start of 2022.

The Energy Department’s move to buy comes as oil prices have declined 13% since early April, with crude oil futures trading at $75.50 at 12:20 in New York. The average purchase price for the oil bought by the department has been $77 a barrel, the agency said.

“DOE will continue to evaluate options to refill the SPR while securing a good deal for taxpayers, taking into account planned exchange returns and market developments,” the department said in a statement.