Exclusive: US to Seek 6 Million Barrels of Oil for Reserve Amid Low Prices, Reports Reuters

By Timothy Gardner

The Biden administration is set to pursue the acquisition of up to 6 million barrels of oil for the Strategic Petroleum Reserve, according to a source familiar with the matter. If this purchase goes through, it will match the administration’s largest effort to replenish the reserve since a historic sale in 2022.

The announcement for the solicitation is expected as early as Wednesday, with the oil to be delivered to the Bayou Choctaw site in Louisiana, one of four heavily protected SPR locations along the Louisiana and Texas coasts.

The U.S. plans to acquire the oil from energy companies for delivery in the early months of 2025. The Department of Energy has been capitalizing on relatively low crude prices, currently below the target price of $79.99 per barrel, which is the price the government aimed for when looking to buy oil back after the significant sale of 180 million barrels in 2022.

As of Tuesday, West Texas Intermediate oil was priced at $71.70 per barrel, having risen recently after Hurricane Francine disrupted crude output in the Gulf of Mexico. However, concerns about demand have kept prices low in the preceding weeks.

President Joe Biden announced the sale in 2022 — the largest ever from the reserve — in response to Russia’s invasion of Ukraine, which contributed to soaring gasoline prices that exceeded $5 per gallon.

To date, the administration has bought back more than 50 million barrels following the sale of the 180 million barrels at an average price of around $95 per barrel, according to the Energy Department.

Although current oil prices are below the target buyback price, geopolitical tensions, particularly in the Middle East, can quickly drive prices higher. In April, the U.S. canceled an SPR oil purchase due to escalating prices.

The reserve currently holds 380 million barrels, primarily comprised of sour crude, which is preferred by many U.S. refineries. The highest recorded amount in the reserve was nearly 727 million barrels in 2009.