The United States has issued a new procurement request, aiming to acquire up to 3 million barrels of oil for March to sustain the replenishment of the Strategic Petroleum Reserve (SPR). Currently hovering near 40-year lows, the SPR holds 352 million barrels of oil, with the Biden administration historically tapping into this emergency stockpile to stabilize oil prices following Russia’s invasion of Ukraine.
The U.S. has prioritized refilling these reserves, particularly given the recent significant decline in crude prices. The Energy Department’s strategy involves procuring oil at $79 per barrel or below, emphasizing its cost-effectiveness for taxpayers.
In recent market activity, West Texas Intermediate crude witnessed a 2.7% rise on Friday, reaching $71.19 per barrel. This uptick occurs amidst challenges faced by OPEC+ in supporting global oil prices, with robust U.S. output contributing to the struggle.
The Energy Department has already acquired approximately 9 million barrels at an average cost of $75, securing an additional nearly 4 million barrels through accelerated exchange returns.
Looking ahead, the government plans to issue monthly solicitations at least until May 2024. However, Deputy Energy Secretary David Turk acknowledges a physical limit in the SPR’s oil intake capacity. Despite this constraint, he expressed determination to acquire a minimum of 3 million barrels, with efforts to enhance capacity and ensure availability for future needs.