- The US is looking to buy 3 million barrels of oil for March 2024 to replenish the Strategic Petroleum Reserve.
- The government is working to refill the emergency stockpile while oil prices are low.
- But there is a limit to how much oil the SPR can physically take at a time.
The US issued a new solicitation to purchase up to 3 million barrels of oil for March, in an effort to keep replenishing the Strategic Petroleum Reserve.
SPR levels continue to stand near 40-year lows, currently holding 352 million barrels of oil. The emergency stockpile was tapped at historic rates by the Biden administration last year to stabilize oil prices after Russia's invasion of Ukraine.
The US has been refilling the reserves, especially as crude prices have fallen sharply in recent months. The Energy Department's plan is to purchase oil at $79 a barrel or below, which it calls a "good deal for taxpayers," the solicitation announcement said.
On Friday, West Texas Intermediate crude rose 2.7% to $71.19 per barrel. That comes as OPEC+ has struggled to prop up global oil prices, as US output has remained strong.
The Energy Department has already purchased around 9 million barrels at an average of $75, while securing almost 4 million barrels in accelerated exchange returns, it said.
Through at least May 2024, the government will also continuing issue further solicitation at a monthly pace.
The latest solicitation comes as there is a physical limit in how much oil the SPR can take a time, Deputy Energy Secretary David Turk told Bloomberg TV this week.
"So we will be doing at least 3 million barrels, and we hope we can bring more capacity online at these price levels to buy as much as we can to refill to make sure we've got that available when we need it in the future," he said.
