The Department of Energy has awarded contracts for a total of 30 million barrels of crude oil to be released from the strategic petroleum reserve in a bid to pressure high retail fuel prices.
In a press release, the DOE said, "The Biden Administration has taken significant steps to address the pain Americans are feeling at the pump as a result of Putin's Price Hike and to help lower energy costs. That includes President Biden authorizing the release of 1 million barrels per day from the SPR for the next six months. That action was joined by 30 other International Energy Agency Member Countries who agreed to collectively release an additional 60 million barrels."
The United States had said 180 million barrels of crude would ultimately be released from the SPR, which makes it the largest ever to be announced by a U.S. government. Following the announcement, oil prices temporarily declined but quickly recouped losses on concerns about regular supply globally. Talks in the EU of an oil embargo on Russia and the latest supply disruptions in Libya were the most recent tailwinds blowing on oil.
The DOE, meanwhile, said that with the latest round of contracts, the total amount of oil to be released from the SPR in May and June would reach 50 million barrels, as it includes previously inked contracts.
The biggest portion will be supplied to Valero, at 6.85 million barrels. Motiva Enterprises will receive 4.05 million barrels from the Department of Energy, and Exxon will receive 3.6 million barrels from the strategic petroleum reserve. Buyers also include Marathon Petroleum, Glencore Chevron, Equinor, Shell, and Philips 66.
The planned release from the U.S. SPR makes up the bulk of a total reserve release of 240 million agreed by members of the International Energy Agency to counter high oil prices. A fellow IEA member, Japan, said this week that it would start auctioning its reserve release on May 10, offering an initial amount of 4.8 million barrels.
By Charles Kennedy for Oilprice.com
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