The U.S. Department of Energy on Jan. 23 issued a Notice of Sale for crude from its Strategic Petroleum Reserve, with bids for 8 million (MMbbl) barrels of light sweet oil due by Jan. 17.
The sale is part of a resolution to sell up to $375.4 million of crude in fiscal year 2017 to fund operational improvements to the infrastructure that holds the emergency reserves.
The sale comes roughly one year after the U.S. lifted a decades-long ban on exporting domestic oil, giving bidders who are awarded contracts the option to export.
There are about 695 MMbbl of oil in the reserves, which are kept in heavily guarded salt caverns along the Texas and Louisiana coasts. The program was developed to shield the U.S. economy from supply disruptions following the 1973 and 1974 Arab oil embargo.
The DOE will sell up to 3 MMbbl each from its Bryan Mound and Big Hill sites in Texas, and up to 2 MMbbl from its West Hackberry site in Louisiana. Contracts will be awarded at the end of January.
Deliveries will take place in March and April, with a possibility for February deliveries.
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