The Department of Energy announced that it has awarded contracts for all of the initial 30 million barrels it put up for sale as part of the emergency release of 1 million barrels per day in oil from the Strategic Petroleum Reserve.
These barrels will be delivered in May and June, and are the first U.S. sale in the largest release from reserves from both the United States and the rest of the world in history.
Together, these releases will make more than one million barrels of oil per day available in the market over the next six months, and will help address supply disruptions caused by Russia’s invasion of Ukraine and the Price Hike that Americans are facing at the pump.
“This is an important step to addressing the supply shortage and the Putin Price Hike Americans are facing. These sales will continue. And because of round-the-clock diplomatic efforts, our partners and Allies have committed to releasing an additional 60 million barrels,” the White House said in a statement.
The initial sale of barrels from the release garnered strong interest and was substantially oversubscribed, according to it. The Department Of Energy received bids for a total of 76 million barrels, or more than double the number of barrels put up for sale.
The release will provide a record amount of supply to the market until the end of the year, when domestic production is expected to increase by 1 million barrels per day.
DOE plans to use the revenue from the release to restock the Strategic Petroleum Reserve in future years.
The United States is already approaching record levels of oil and natural gas production, with domestic production expected to increase by 1 million barrels per day this year and more than 500,000 barrels per day next year.
But the Biden administration noted that too many companies aren’t doing their part and are choosing to make extraordinary profits and without investing to help with supply.
It is estimated that currently, the oil and gas industry is sitting on more than 12 million acres of non-producing Federal land with 9,000 unused but approved permits for drilling.
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