The U.S. Department of Energy said Friday it is looking to purchase up to 3 million barrels of oil to refill its Strategic Petroleum Reserve, in an effort to replenish the nation’s emergency stockpile after it was drained last year to a 40-year low.
In a solicitation notice, Energy Department officials said they are seeking to buy up to 3 million barrels of sour crude for the Strategic Petroleum Reserve, or SPR, for delivery in March 2024.
More specifically, officials said they are looking to purchase sour crude to replenish the Big Hill storage facility in Texas.
Last week, it also announced a similar solicitation for up to 3 million barrels of SPR oil for delivery in February 2024. DOE has already purchased roughly 9 million barrels for the SPR at an average of $75 per barrel, and secured nearly 4 million barrels in accelerated exchange returns.
The updates comes after President Joe Biden ordered the sale of 180 million barrels of SPR oil last March—the largest one-time drawdown in U.S. history—in an effort to stabilize soaring energy costs for consumers in wake of Russia's invasion of Ukraine.
And while the SPR sales did help alleviate prices for U.S. consumers, they also depleted the nation's emergency stockpile, sending levels plummeting to their lowest level since the stockpile's creation in the 1980s and prompting concerns that the low supply could leave the U.S. vulnerable and resource strapped in the event of an emergency.
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More recently, the Energy Department has struggled to refill the U.S. emergency stockpile. Last October, it outlined a buyback plan targeting oil prices of between $67 to $72 per barrel to replenish the reserves. Later, it raised the price to $79.
There are physical limitations to how much oil can be funneled back into the SPR, which consists of four enormous underground salt caverns along the Gulf Coast in Texas and Louisiana.
In an interview on BloombergTV this week, Deputy Energy Secretary David Turk said the constraints limit purchases to 3 million barrels a month. “We are refilling as much as we can," he said. "We've been doing that for the last several months. And at this price level, we'll keep doing it."
Looking ahead, Turk said, “[W]e hope we can bring more capacity online at these price levels to buy as much as we can to refill to make sure we've got that available when we need it in the future.”
Current SPR levels stand at 352 million barrels, according to data from the Energy Information Administration, just slightly higher than July, when levels reached an all-time low of 347,000 barrels.
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As of this writing, two of the SPR sites are offline for maintenance.