US Crude Oil Supplies Seek Stabilization Following the State Reserve Oil Sale to 8 Companies

The US Department of Energy has confirmed the award of contracts to eight companies for the price-competitive sale of 20 million barrels of crude oil from the country’s Strategic Petroleum Reserve (SPR). The contracts were decided after careful consideration of a total of 104 bids and responses from 15 companies received concerning the auction announced by the US government earlier on August 23.

The eight contract awardees include Atlantic Trading & Marketing Inc., ExxonMobil Oil Corporation, Chevron USA, Phillips 66 Company, Unipec America Inc., Valero Marketing and Supply Company, Motiva Enterprises LLC, Marathon Petroleum Supply and Trading LLC. 

The 20 million barrels of oil will be drawn from the four SPR storage sites i.e., Big Hill (contributing 8.05 million barrels of oil), West Hackberry (contributing 6.1 million barrels of oil), Bryan Mound (contributing 5.1 million barrels of oil), and Bayou Choctaw (contributing 0.75 million barrels of oil). The delivery of the SPR crude oil to the companies has been planned between October 1 to December 15 of this fiscal year.

The US government confirmed the SPR sale to be a part of a Congressional mandate strategized to strengthen the US treasury. However, the announcement came amid the surging crude oil prices due to tight supplies. The ongoing crude oil price in the US is USD 70.60 per barrel. Three-quarters of the oil production facilities of the Gulf of Mexico responsible for generating 1.4 million barrels of oil per day got disrupted in late August due to heavy damages from Ida. As per ChemAnalyst, the outages of US offshore oil production facilities have caused a stir among the crude oil buyers and suppliers. Selling SPR crude oil amid the ongoing constraints will bring a huge relief to the oil and refinery sectors by stabilizing the supplies in the end-user industries and bringing down the oil prices.