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US purchases 6 million barrels of oil for Strategic Petroleum Reserve

The U.S. has bought 6 million barrels of oil for the Strategic Petroleum Reserve for shipment through May 2025, the Department of Energy said on Monday.

The purchases become part of an effort to renew stockpiles after President Joe Biden bought the largest ever sale from the reserve in 2022 of 180 million barrels in an effort to control fuel rates following Russia's intrusion of Ukraine.

The U.S. purchased 3.5 million barrels from Exxon Mobil , 2 million from Shell Trading Company, and 500,000 from Macquarie Commodities Trading US, for a total expense of more than $ 411 million, the department said.

The sour crude, or oil that many U.S. refineries are engineered to procedure, will be provided at a rate of 1.5 million barrels per month from February to May next year to the Bayou Choctaw site in Louisiana.

After that, the department just has adequate money in its fund for SPR purchases to purchase about another 2 million barrels at about $75 per barrel. To continue to keep filling the SPR after that, the department needs to ask Congress for more money and/or persuade it to cancel upcoming congressionally-mandated sales.

The department previously worked with Congress almost two years ago to assist replenish the SPR by cancelling sales of 140 million barrels that had been mandated through 2027 to raise money for federal government programs.

(source: Reuters)