US purchases 6 million barrels of oil to rebuild Strategic Petroleum Reserve

September 30, 2024 09:53 PM PDT | By Invezz

US purchases 6 million barrels of oil to rebuild Strategic Petroleum Reserve — Image source: Invezz

Oil procurement breakdown

The 6 million barrels of crude oil were purchased from three suppliers: 3.5 million barrels from Exxon Mobil, 2 million barrels from Shell Trading Company, and 500,000 barrels from Macquarie Commodities Trading US.

The total cost of these purchases exceeded $411 million.

The oil, classified as sour crude—a type that many US refineries are designed to process—will be delivered in installments to the Bayou Choctaw site in Louisiana.

Starting in February 2025, the delivery will proceed at a rate of 1.5 million barrels per month, concluding in May 2025.

Funding limitations for future SPR replenishment

While this latest procurement boosts the SPR’s stock, the Department of Energy has limited funds left for further purchases.

After these deliveries, the department can only afford to buy an additional 2 million barrels at around $75 per barrel.

To continue replenishing the SPR beyond that, the department will need to request additional funding from Congress or seek approval to cancel planned congressionally-mandated sales.

In an earlier effort to prioritize refilling the SPR, the department successfully worked with Congress to cancel 140 million barrels of mandated sales scheduled through 2027.

These sales were initially planned to raise money for government programs, but their cancellation has allowed the Department to focus on strengthening the country’s strategic oil reserves amidst ongoing geopolitical uncertainties.

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