US inks first contacts for oil sale from strategic reserve

The US has signed first contracts for the sale of crude oil from the Strategic Petroleum Reserve, according to the message posted on the Department of Energy's Office of Fossil Energy.

A notice of sale for a price-competitive sale of up to 8 million barrels of light sweet crude oil was issued by the Department of Energy Jan. 9.

Contracts were awarded to Shell Trading (US) Company and Phillips 66 Company for the total sale of 6.4 million barrels of crude oil, according to the message.

"Of this amount, 1.7 million barrels will be sold from the Bryan Mound site, 3 million barrels from the Big Hill site, and 1.7 million barrels from the West Hackberry site," said the Office of Fossil Energy.

Reportedly, the deliveries will be scheduled to take place in March and April.

The Strategic Petroleum Reserve (SPR) is the worldchr("39")s largest supply of emergency crude oil. The federally-owned oil stocks are stored in huge underground salt caverns along the coastline of the Gulf of Mexico.

Decisions to withdraw crude oil from the SPR are made by the president under the authorities of the Energy Policy and Conservation Act (EPCA). In the event of an energy emergency, SPR oil would be distributed by competitive sale. The SPRchr("39")s formidable size (design capacity of 713.5 million barrels) makes it a significant deterrent to oil import cutoffs and a key tool of foreign policy.

By Leman Zeynalova - Trend