Strategic Petroleum Reserve Replenished by US with 6 Million Barrels Purchase
In a move to bolster its Strategic Petroleum Reserve, the US has acquired 6 million barrels of oil for delivery up to May 2025. This purchase comes after President Joe Biden’s decision to release 180 million barrels from the reserve in 2022 to stabilize fuel prices amidst Russia’s invasion of Ukraine.
The purchases include 3.5 million barrels from Exxon Mobil, 2 million from Shell Trading Company, and 500,000 from Macquarie Commodities Trading US, totaling over $411 million. The sour crude will be delivered at a rate of 1.5 million barrels per month to the Bayou Choctaw site in Louisiana from February to May next year.
However, the Department of Energy’s fund for SPR purchases may only cover another 2 million barrels at $75 per barrel. To continue filling the reserve, the department will need additional funding from Congress or to halt congressionally-mandated sales. In the past, Congress collaborated with the department to cancel sales of 140 million barrels to replenish the SPR.
In conclusion, the US government’s decision to replenish the Strategic Petroleum Reserve is crucial for maintaining energy security and stabilizing fuel prices. This move showcases a proactive approach to mitigate the impact of geopolitical events on the economy and consumers. It is essential for investors and the general public to monitor these developments as they can have significant implications on financial markets and daily expenses.