The Department of Energy (DOE) has opened a request for proposals (RFP) for the purchase of up to 3 million barrels of domestic sour crude oil to be delivered to the Strategic Petroleum Reserve. The RFP requires sellers to submit their proposals by 11 a.m. ET on January 10, with contract awards set to be announced on January 19. It is important to note that the acquisition of crude oil must be made using U.S. flagged vessels.
The DOE's solicitation targets crude oil with an API gravity ranging from 28.5 to 35 and a total sulfur content within the range of 0.51% to 2.5%.
It should be emphasized that the RFP does not obligate the government to purchase the crude oil, and DOE intends to make awards based on a firm, fixed-price basis, allowing for the possibility of multiple awards.
DOE has outlined that discussions with bidders will be limited to clarifications as necessary, and all proposals should include the best pricing and technical terms.
As of December 26, DOE had already agreed to purchase a significant amount of SPR crude (2,993,692 million barrels) for delivery in March. The winning bids for this purchase were from Sunoco Partners Marketing & Terminals (1,197,485 barrels), Macquarie Commodities Trading US (898,105 barrels), and Phillips 66 (898,102 barrels).
This report was compiled by Denton Cinquegrana and edited by Jeff Barber.