The US Department of Energy (DoE) has awarded contracts to purchase three million barrels of crude oil produced in the US to support the Strategic Petroleum Reserve (SPR).

The contracts have been awarded following the Request for Proposal (RFP), announced earlier this month.

DOE has received a total of 33 proposals in response to the RFP, from nine companies.

It has awarded the contracts to three companies, which met quality and specification requirements, in addition to providing competitive bids.

Sunoco Partners Marketing & Terminals has been awarded a contract for 1.2 million barrels, and Macquarie Commodities Trading US and Phillips 66 for 900,000 barrels each.

DOE is purchasing crude oil at an average price of $77.31 per barrel, which is well below the average of about $95 per barrel in 2022.

The department expects the deliveries to begin in March 2024, to the Big Hill SPR storage site in Texas.

US DOE, in its statement, said: “Today’s announcement advances the President’s commitment to safeguard and replenish this critical energy security asset.

“This follows President Biden’s historic release from the SPR to address the significant global supply disruption caused by Putin’s war on Ukraine and help keep the domestic market well supplied, ultimately helping to bring down prices for American consumers and businesses.

“Analysis from the Department of the Treasury indicates that SPR releases last year, along with coordinated releases from international partners, reduced gasoline prices by as much as 40 cents per gallon.”

The US government has purchased a total of about 14 million barrels of oil for the SPR, at an average price of $75.63 per barrel.

It will get nearly four million barrels of crude from the oil companies in the form of exchange returns as part of the government’s strategy to refill the SPR.

The oil stocks are stored in underground salt caverns at four sites in Texas and Louisiana, with scheduled maintenance periods and the Life Extension 2 programme.

DOE said that the SPR continues to be the world’s largest supply of emergency crude oil and will prioritise the operational integrity of the SPR as an energy security asset.