OBSTACLES HAMPER SPR REPLENISHMENT
Physical constraints and maintenance work at Gulf Coast underground oil caverns are limiting the Biden administration ’ s ability to capitalize on lower oil prices to replenish the Strategic Petroleum Reserve , Deputy Energy Secretary David Turk told Bloomberg Business . The Energy Department has added 12 million barrels of oil back to the reserve since January , but ongoing challenges have imposed a monthly purchase cap of around 3 million barrels , Bloomberg Business reported .
Following the finalization of contracts for the most recent solicitation of crude oil for the Strategic Petroleum Reserve ( SPR ), the U . S . Department of Energy confirmed Dec . 1 that more than 12 million barrels have been delivered or secured for purchase or return by February 2024 .
Since January of this year , DOE has directly purchased nearly 9 million barrels at an average price of $ 75 dollars a barrel , it said in a statement . This is about $ 20 per barrel lower than the $ 95 average sales price for 2022 ’ s emergency sales , the Administration said . DOE has also successfully accelerated nearly 4 million barrels in exchange returns initially slated for the summer of 2024 to maximize SPR refill . These purchases and exchanges are on top of the 140 million barrels secured for the SPR by working with Congress to cancel previously-mandated sales for Fiscal Years 2024 through 2027 .
“ The Administration ’ s ongoing threepart replenishment strategy to get the best deal for taxpayers while increasing SPR stocks is working ,” said U . S . Secretary of Energy Jennifer M . Granholm . “ The
SPR is a critical energy security tool and has proven effective in providing supply to industry and American consumers during times of severe disruption — we are committed to making sure it can continue to serve its mission .”
This milestone underscores the President ’ s commitment to safeguard and replenish this critical energy security asset . This follows his historic release from the SPR to address the significant global supply disruption caused by Putin ’ s war on Ukraine and help keep the domestic market well supplied , ultimately helping to bring down prices for American consumers and businesses . Analysis from the Department of the Treasury indicates that SPR releases last year , along with coordinated releases from international partners , reduced gasoline prices by as much as 40 cents per gallon . l FON 10 JANUARY 2024 | FUEL OIL NEWS | www . fueloilnews . com