WASHINGTON, D.C. – Today, the U.S. Department of Energy (DOE) announced that, consistent with statutory direction, DOE currently plans to sell crude oil from the Strategic Petroleum Reserve (SPR) over a multi-month period during Fiscal Year (FY) 2021. The Department expects to begin deliveries in May 2021, but if market conditions warrant, deliveries could begin as early as April 2021.
DOE remains confident in the long-term health of crude oil markets. During the current period of economic recovery, the Department recognizes that a conservative approach to oil sales is prudent. The precise timing and amount of the sale(s) is to be determined. DOE welcomes industry input on FY 2021 sales and currently plans to assess the appropriate timing and amount of 2021 sales in early March.
The SPR is the world’s largest supply of emergency crude oil, and the federally owned oil stocks are stored in underground salt caverns at four storage sites in Texas and Louisiana. The Reserve has a long history of protecting the economy and American livelihoods in times of emergency oil shortages, such as hurricanes and geopolitical events, or during oil surpluses, such as those caused by COVID-19 related demand destruction.
Section 403 of the Bipartisan Budget Act of 2015 and the Consolidated Appropriations Act of 2018 require a mandatory sale of slightly more than 10 million barrels during FY 2021. The proceeds are to be deposited in the U.S. Treasury by fiscal year end.
In addition, as directed by Section 404 of the Bipartisan Budget Act of 2015, and modified by the CARES Act of 2020, the Secretary may sell additional oil to raise up to $450 million for infrastructure modernization at the SPR. This could require up to 10 million barrels of additional sales.
After the Department establishes its FY 2021 sales plan, all sales will be publicly announced. Companies that wish to participate in the sale may register through the SPR website’s Crude Oil Sales Offer Program.
Industry parties wishing to provide input to the Department on fiscal year 2021 sales are directed to contact Mr. Barton Barnhart, Deputy Assistant Secretary of Petroleum Reserves, U.S. Department of Energy, at email@example.com.
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