Energy Department seeks exchange of up to 17 million barrels from reserve
The solicitation follows a 40-million-barrel exchange offer in September and a separate 4-million-barrel emergency exchange this month.
Published
The US Department of Energy is seeking to exchange up to 17 million barrels of crude oil from the Strategic Petroleum Reserve.
An exchange is not a sale. Companies that take barrels out must return them later, plus extra barrels as interest. The Department of Energy's 40-million-barrel exchange offer, announced September 29, works the same way: barrels come back with a premium, adding to the reserve's long-term inventory at no cost to taxpayers, the department said. That offer built on five earlier emergency exchanges that together moved roughly 133 million barrels, according to Rigzone.
The department authorized a smaller, separate exchange on October 10, sending up to 2 million barrels each to ExxonMobil and BP America to cover Gulf supply disruptions from hurricanes. Those companies must return the barrels, plus a premium, in 2027. The department has used exchanges for localized disruptions before, including 1.8 million barrels after the 2022 Keystone pipeline shutdown, and in 2020 it took in 32 million barrels from companies during the pandemic and had 29.5 million returned the following year, according to the Atlantic Council.
The reserve stood at about 283 million barrels in the week ending October 2, its lowest level since October 1982, according to EIA data cited by Energy News Beat. Weekly figures have shown no increase even as officials describe refilling the reserve as a priority. Because an exchange returns barrels rather than drawing the reserve down for good, the 17-million-barrel solicitation adds supply to the market in the near term without changing that depleted baseline, leaving the gap between stated plans to rebuild the reserve and its actual level unresolved.