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The
department will buy up to 3 million barrels for delivery in
February, a senior official told reporters.
President Joe Biden announced the 180 million sale in late March
to combat surging gasoline prices that boosted inflation after
the February invasion of Ukraine by Russia, the world's largest
exporter of fossil fuels.
The sale shrunk levels in the SPR to about 380 million barrels,
their lowest since 1984, raising concerns about energy security.
"We'll be releasing a solicitation to purchase 3 million barrels
of oil for delivery in February of next year, 2023," the
official said.
Contracts will be awarded to energy companies by Jan. 13.
"This approach will lock in a price upfront when companies
submit their bids," the official added.
To help relieve supply shortages at refineries after an oil
spill last week shut down the Keystone crude pipeline, the
Energy Department will also execute an exchange of about 2
million barrels from the SPR, that companies will have to send
back at a later date.
"We are able to do that at the same time we're doing the 3
million barrel buy-back," the official said.
The White House said in October it would buy back oil for the
SPR when prices at or below about $67-$72 per barrel, a bit
below where U.S. benchmark futures were trading on Friday at
about $75. [O/R]
"We're gonna try to be nimble and flexible here," the official
said, adding that the department likes where prices are now for
exploring buy-backs.
"It'd be very useful to put this notice out now and to see what
the market would provide in terms of interest and at what price
level for that," the official said.
The Energy Department said buying oil back at about current
prices is "an opportunity to secure a good deal for American
taxpayers by repurchasing oil at a lower price than the $96 per
barrel average price it was sold for, as well as to strengthen
energy security."
(Reporting by Timothy Gardner; additional reporting by Richard
ValdmanisEditing by Marguerita Choy)
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