U.S. Awards $242 Million in SPR Contracts to Exxon, Macquarie, Phillips 66, Sunoco

(Reuters) — The Biden administration has awarded Strategic Petroleum Reserve (SPR) contracts for 3.1 million barrels of oil worth more than $242 million to Exxon, Macquarie, Phillips 66 and Sunoco, the U.S. Energy Department said in a statement on Monday.

In a strategic move to fortify the Strategic Petroleum Reserve (SPR), the United States recently acquired 3.2 million barrels of oil. This decision follows the significant sale of a record amount from the reserve after Russia's invasion of Ukraine in 2022, as indicated by a Department of Energy document released on Jan. 19.

The breakdown of the purchase reveals that Exxon Mobil contributed 1.4 million barrels, Macquarie Commodities Trading provided 600,000 barrels, and BP Products North America supplied an additional 600,000 barrels. Phillips 66 Co. and Sunoco Partners Marketing & Terminals LP each secured contracts for 300,000 barrels.

In a move to further replenish the SPR, the U.S. government is actively seeking to purchase up to 3 million barrels of domestically produced sour crude oil. This initiative, announced by the Department of Energy on Jan. 3, is part of President Joe Biden's administration's efforts to rebuild the SPR after selling a historic 180 million barrels in 2022 to address soaring oil prices following Russia's invasion of Ukraine.

Bids for this solicitation were set to close on Jan. 10. The Department of Energy has successfully acquired approximately 13.8 million barrels at an average price of $75.63 per barrel. This marks a nearly $20 reduction per barrel compared to the selling price in 2022. The department has expedited the return of nearly 4 million barrels from loans to oil companies.

Moreover, through collaboration with Congress, the Department of Energy has managed to cancel mandatory sales of 140 million barrels from the SPR, a requirement stipulated by laws passed by both Democrats and Republicans for about four years, starting in late 2023.

As it stands, the SPR, recognized as the world's largest emergency oil supply, currently stores around 354.4 million barrels in underground salt caverns located across four coastal sites in Texas and Louisiana. The recent contracts awarded to Exxon, Macquarie, Phillips 66, and Sunoco contribute to the ongoing efforts to reinforce the nation's energy security and address the challenges posed by geopolitical events and market conditions.

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