The US Department of Energy (DoE) has awarded contracts to energy companies for the exchange of roughly 53.3 million barrels (mbbl) of crude oil from multiple sites within the Strategic Petroleum Reserve (SPR).
The contracts were granted via the Office of Petroleum Reserves, with the oil to be sourced from the Bayou Choctaw, Bryan Mound, Big Hill and West Hackberry sites in the Gulf Coast region.
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This action represents a further step in the US’ fulfilment of its 172mbbl commitment to the International Energy Agency’s coordinated efforts to support stability in the global oil market.
The development comes after the DoE issued a request for proposal in late April.
The Bayou Choctaw facility is situated in Iberville Parish, Louisiana, around 12 miles south-west of Baton Rouge. Acquired in April 1977 and operational from 1987, it contains six caverns and can store up to 76mbbl.
Big Hill is located in Jefferson County, Texas, roughly 26 miles from Beaumont.
This oil storage site was obtained in stages during 1982 and 1983, with operations commencing in 1991. It includes 14 caverns with a total authorised capacity of 170mbbl.
Meanwhile, Bryan Mound is located in Brazoria County, Texas, close to Freeport, and was acquired in April 1977.
Operations began in 1986 and the site features 19 caverns with storage permission for up to 247.1mbbl.
West Hackberry lies in Cameron Parish, Louisiana, approximately 25 miles from Lake Charles. The site dates back to April 1977 and was opened in 1988. It now hosts 21 caverns with an authorised limit of 220.4mbbl.
Deliveries of crude will commence immediately as part of these contracts, according to the DoE.
The DoE confirmed that companies can begin arranging deliveries immediately. The department aims to assess market dynamics and operational capacity as it works to meet US commitments under the international coordinated release.
DoE Hydrocarbons and Geothermal Energy Office Assistant Secretary Kyle Haustveit said: “With today’s announcement of contract awards, we are advancing the president’s commitment to carrying out this historic emergency exchange.
“These actions continue to move oil swiftly into the market, address near-term supply needs and ensure that the Strategic Petroleum Reserve remains strong through the return of premium barrels.”
US President Donald Trump and Secretary of Energy Chris Wright oversee the SPR as a vital national security asset aimed at stabilising oil markets and enhancing energy security.
Approximately 35mbbl have been supplied to the market, alongside an equivalent addition to the SPR at no extra cost to taxpayers.
The DoE is set to exchange more than 53.3mbbl of crude oil, achieving a return premium of around 28%, or 15.1mbbl.
This builds on past exchanges that released approximately 80mbbl from sites such as Bayou Choctaw, Bryan Mound and West Hackberry.
Companies can utilise the president’s limited Jones Act waiver to expedite near-term oil deliveries to the market.
