The U.S. Department of Energy has withdrawn a solicitation for the purchase of 30 million barrels of oil for the Strategic Petroleum Reserve (SPR), citing a lack of certainty around congressional funding.

Officials from the DOE did not respond to a request for comment on March 25 but released an amendment to its solicitation saying that the request to buy oil was withdrawn.

“Should funding become secure for the planned purchases, the department will reissue the solicitation,” the department’s notice said. 

On March 13, President Donald J. Trump directed Energy Secretary Dan Brouillette to purchase oil for the SPR as he declared a national emergency related to the coronavirus. Prices have spiraled down as Saudi Arabia also flooded the market with oil after it was unable to come to a quota agreement with Russia. This week, Rystad Energy said that the pandemic could cause global energy demand to collapse by more than 10 million barrels per day by April. 

“We’re going to fill it right up to the top,” Trump had said, “saving the American taxpayer billions and billions of dollars, helping our oil industry and making us even further toward that wonderful goal—which we’ve achieved, which nobody thought was possible—of energy independence.”

A process for purchases was in place and continuing by late March 25. However, Republicans were unable to add $3 billion to an emergency stimulus bill negotiated by Congress this week. 

Senate Minority Leader Chuck Schumer (D-N.Y.) said in a letter to colleagues that it did not include what he described as a “bailout for big oil,” The Hill reported.

However, small and midsize oil producers were the focus of the initial purchases. Buyers with fewer than 5,000 employees were eligible to submit proposals.  

“The small to midsize oil producers, which are the focus of the initial crude oil purchase, employ thousands of Americans,” said Under Secretary of Energy Mark W. Menezes. “These businesses have been particularly hard hit by recent events but under President Trump’s leadership, we are taking swift action to assist hard-hit producers and deliver strong returns to the taxpayer.”

The department planned to purchase a total of 77 million barrels of U.S. crude to top off the SPR while prices are at dramatic lows. As of March 20, the SPR held 635 million barrels of oil, including 384.7 million barrels of sour oil. The reserve has a 713.5 million barrels storage capacity.

On March 19, Brouillette said that the department was “moving quickly to support U.S. oil producers facing potentially catastrophic losses from the impacts of COVID-19 and the intentional disruption to world oil markets by foreign actors.”

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