The DOE had announced the purchase plan in May as a step to refill the emergency stockpile after a record release following Russia’s invasion of Ukraine last year.
“These 3 million barrels are being purchased for an average price of about $73 per barrel, lower than the average of about $95 per barrel that SPR crude was sold for in 2022, securing a good deal for taxpayers,” the DOE said in a press release.
The administration had previously said it would start to buy oil back into the reserve when prices are at or below $72 per barrel. Benchmark U.S. crude futures traded around $70 a barrel on Friday.
The barrels will be delivered to the Big Hill SPR site in Texas, the DOE said.
The department also said it launched a new solicitation for another 3 million barrels for delivery to the stockpile’s Big Hill site in September. It said bids should be received by June 20, with awards by the end of the month.
The Biden administration last year conducted the largest ever sale from the SPR of 180 million barrels, part of a strategy to stabilize soaring oil markets and combat high pump prices in the aftermath of Russia’s invasion of Ukraine.
The sale angered Republicans who accused the administration of leaving the U.S. with too thin a supply buffer to adequately respond to a future supply crisis.
It also became a sore point for U.S. relations with Saudi Arabia by depressing prices for the kingdom’s top export.
The sales brought the SPR inventory to around 372 million barrels, the lowest since 1983, amounting to just under 20 days of cover at current U.S. consumption rates.
(Writing by Richard Valdmanis; editing by Jonathan Oatis and Marguerita Choy)