Washington Awards Contracts to Swap More Than 40 Million Barrels From Oil Reserve
Key Facts
The U.S. Department of Energy said on October 29 that it had awarded contracts to swap more than 40 million barrels of crude oil from the Strategic Petroleum Reserve, completing the U.S. share of an international effort to release oil from government stockpiles. The department said the contracts are part of fulfilling a U.S. commitment to release 172 million barrels, contributing to a coordinated release of 400 million barrels from the reserves of International Energy Agency member countries. The announcement puts the volume covered by the contracts at more than 40 million barrels, while noting that the overall U.S. commitment is larger than the volume covered by these contracts. The department described the move as part of fulfilling that commitment, while saying in an earlier announcement that the goal of releasing reserves was to support stability in oil markets. On September 29, the department had issued a solicitation to swap up to 40 million barrels, setting November and December 2026 as the expected delivery dates under the contracts to be awarded.
The swap involves making crude from the reserve available now in exchange for oil to be returned later, under the terms of the contracts announced by the department. The oil covered by the contracts will be drawn from the Strategic Petroleum Reserve's Big Hill and Bryan Mound sites. Deputy Energy Secretary Kyle Haustveit said more than 216 million barrels would be returned to the reserve starting in early 2027, including an additional 44 million barrels as a premium. The department valued the returned barrels at more than $4 billion and said this would add no cost for taxpayers. The mechanism therefore combines making crude available under the current action with a commitment to return a larger volume of oil to storage later, according to the department's details.
The announcement is part of a series of swap operations the department offered during 2026. In the first phase, the department said it would proceed with swapping 45.2 million barrels of crude in exchange for the return of 55 million barrels, saying the operation would cost taxpayers nothing. In another phase, it awarded contracts to swap more than 53.3 million barrels, with a return premium of about 28%, equivalent to an additional 15.1 million barrels. These terms show that the return volumes announced by the department exceed the oil awarded in those phases. The Strategic Petroleum Reserve held 282.2 million barrels on October 16, according to Department of Energy data, the level recorded before the new contracts were announced.
In market data, Brent crude closed at $110.8 a barrel on October 29 and then at $112.93 on October 30, according to EL7 data. West Texas Intermediate closed at $102 a barrel on October 29 and then at $103.85 the following day. These closing data do not attribute the moves solely to the contract announcement. In a separate report, The Associated Press said Brent rose 3.1% to $116.72 a barrel in the session covered by the report, after being below $97 at the start of October. These figures reflect different levels reported by specific sources and for specific periods, while the department's announcement concerned arrangements to make crude available and return it to the reserve.
The coordinated effort extends beyond U.S. crude oil. The International Energy Agency said member-country governments had agreed to accelerate the release of the remaining volumes, with plans including more than 20 million barrels of diesel “as soon as possible.” The agency also said its secretariat would continue tracking progress toward completing the collective action that began in March 2026. This places the Department of Energy's contracts within a broader effort to fulfill member countries' supply commitments, alongside the agency's monitoring of implementation and energy-market developments. Haustveit said the return of more than 216 million barrels to the U.S. reserve would begin in early 2027.