US Energy Department Awards New Contracts For 26 Million Barrels Of Crude Oil From Strategic Petroleum Reserve, Advancing Emergency Exchange.

Washington DC; April 2026: The U.S. Department of Energy’s (DOE) Hydrocarbons and Geothermal Energy Office (HGEO) today announced awards of contracts to exchange 26 million barrels of crude oil from the Strategic Petroleum Reserve (SPR) at the West Hackberry site, marking the next phase of DOE’s execution of the United States’ 172-million-barrel contribution to the International Energy Agency’s collective action to stabilize global oil supply. These awards follow DOE’s recent Request for Proposal (RFP) for this portion of the emergency exchange, with deliveries beginning immediately as the Department continues to move quickly to address short-term supply disruptions and strengthen energy security for the United States.

“Through this emergency exchange, the Department is taking swift action to support near‑term supply needs while strengthening the Strategic Petroleum Reserve for the long term”, said Kyle Haustveit, Assistant Secretary of the Hydrocarbons and Geothermal Energy Office. “By returning additional premium barrels at no cost to taxpayers, this exchange reinforces market reliability today and delivers meaningful value to the American people when those barrels are returned”.

Under these awards, DOE will move forward with an exchange of 26 million barrels of crude oil, which will be returned with additional premium barrels by next year, supporting energy security and delivering value for the American people at no cost to taxpayers. This action builds on earlier exchange actions, which have already awarded approximately 55 million barrels from the Bayou Choctaw, Bryan Mound, and West Hackberry sites, demonstrating the reserve’s ability to deliver crude efficiently under emergency conditions. To date, more than 10 million barrels have already been delivered to market. The exchange also allows participating companies to take advantage of the President’s limited Jones Act waiver, helping accelerate critical near-term oil flows into the market.

Companies can begin scheduling deliveries immediately. DOE will continue to evaluate market conditions and operational capacity as it advances additional steps to meet the full United States commitment under the coordinated international release.

The Strategic Petroleum Reserve (SPR), the world’s largest supply of emergency crude oil was established primarily to reduce the impact of disruptions in supplies of petroleum products and to carry out obligations of the United States under the international energy program. The federally-owned oil stocks are stored in huge underground salt caverns at four sites along the coastline of the Gulf of America. The sheer size of the SPR (authorized storage capacity of 714 million barrels) makes it a significant deterrent to oil import cutoffs and a key tool in foreign policy.

SPR oil is sold competitively when the President finds, pursuant to the conditions set forth in the Energy Policy and Conservation Act (EPCA), that a sale is required. Historically, the President has authorized emergency releases from the SPR on four occasions.  

Additionally, the Secretary of Energy may authorize limited releases in the form of exchanges with entities that are not part of the Federal Government. This authority allows the SPR to negotiate exchanges where the SPR ultimately receives more oil than it released; thereby acquiring additional oil. With the exception of the 2000 Heating Oil Exchange, the SPR has entered into negotiated contracts at the request of private companies in order to address short-term, emergency supply disruptions to a refiner’s normal operations on several occasions.

The SPR Distribution Systems sites are connected to midstream assets within three distribution systems:  Seaway, Texoma, and Capline. The Seaway System includes the Bryan Mound SPR site and connects to refinery hubs in Houston, Texas City, and Freeport. The Texoma System includes the Big Hill and West Hackberry SPR sites. Both Big Hill and West Hackberry have connectivity to the Beaumont-Port Arthur, Lake Charles, and New Orleans area refineries, and limited connectivity to the Houston area refineries. The Capline System includes the Bayou Choctaw SPR site and connects to the Baton Rouge area refineries as well as one New Orleans area refinery.

As of March 2025, the four SPR storage sites were connected by SPR owned pipelines and commercially owned pipelines and terminals, to 24 Gulf Coast area refineries and six refineries located in Michigan, Ohio, and Kentucky.

The SPR also connects to three marine terminals that have a combined contracted marine distribution capacity of 2.220 MMbbl/day (Mbbl – One thousand barrels of crude oil, bitumen, condensate or natural gas liquids per day), and it owns one marine terminal (leased to ExxonMobil Pipeline Company) with a distribution capacity of 400 Mbbl/day. These marine terminals are: Seaway Terminal (Enterprise Products), Freeport, Texas; Seaway Terminal (Enterprise Products), Texas City, Texas; Energy Transfer Terminal, Nederland, Texas; and the DOE-owned, St. James Terminal, St. James, Louisiana.

It was US President Gerald Ford established the SPR in 1975 after the Organization of Arab Petroleum Exporting Countries (OAPEC) imposed an oil embargo against the United States, triggering an energy crisis that sent the U.S. economy into a recession. To mitigate damage from any future shortages of oil, DOE acquired several existing salt caverns along the Gulf of America to serve as the first storage sites in 1977.

In the event of an oil supply disruption, the United States can turn to the SPR. These emergency stockpiles of crude oil are used to combat the potential market effects of both domestic and international disruptions caused by weather, natural disasters, labour strikes, technical failures / accidents, and political disputes or conflicts. The United States can also fill the SPR during times of demand destruction or oversupply to reduce shut-ins of U.S. oil production.

Team Maverick.