The U.S. Department of Energy’s (DOE) Office of Fossil Energy announced last week a notice of sale of crude oil from the Strategic Petroleum Reserve (SPR).
DOE intends to draw down and sell 10.1 million bbls. of crude oil from the SPR. This sale is to fulfill the requirements of Section 403(a)(4) of the Bipartisan Budget Act of 2015 (5 million bbls.) and the Consolidated Appropriations Act of 2018 (5.1 million bbls.), which combined require a mandatory sale of 10.1 million bbls. during fiscal year 2021. The proceeds of the sale will be deposited in the U.S. Treasury.
The notice of sale includes a price-competitive sale of up to 10.1 million bbls. of SPR crude. The sale will be conducted with crude oil from the following three SPR sites (maximum amount from each site listed):
- Up to 5 million bbls. from Bryan Mound
- Up to 5 million bbls. from Big Hill
- Up to 5 million bbls. from West Hackberry
DOE must receive bids no later than 9:00 a.m. central time on Wednesday, Feb. 24, 2021. DOE will award contracts to successful offerors no later than March 4, 2021. Deliveries will take place in April and May 2021, with early deliveries available in March 2021.
The SPR is the world's largest supply of emergency crude oil, and the federally owned oil stocks are stored in underground salt caverns at four storage sites in Texas and Louisiana. The SPR has a long history of protecting the economy and U.S. livelihoods in times of emergency oil shortages. Those include hurricanes and geopolitical events as well as times when there are oil surpluses, such as those caused by Covid-19-related demand destruction.
Any company registered in the SPR’s Crude Oil Sales Offer Program is eligible to participate in this and other SPR crude oil sales. Other interested companies may register through the SPR website’s Crude Oil Sales Offer Program.
