U.S. awards contracts on round one of historic oil sale from strategic reserve - Reuters

The Bryan Mound Strategic Petroleum Reserve, an oil storage facility, is seen in this aerial photograph over Freeport, Texas, U.S., April 27, 2020. REUTERS/Adrees Latif

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WASHINGTON, April 21 (Reuters) - The U.S. Department of Energy said on Thursday it has awarded contracts for 30 million barrels of crude oil in the initial round of the largest sale ever from the Strategic Petroleum Reserve (SPR) in response to price hikes caused by Russia's invasion of Ukraine.

President Joe Biden announced last month the sale of 1 million barrels of oil per day from the SPR over six months starting in May. read more

Western sanctions on Russia and a hesitancy from buyers to purchase its oil have helped push U.S. gasoline prices to record levels above $4.30 a gallon. Russia had typically produced about 10% of global oil.

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"This is an important step to addressing the supply shortage and the (Russian President Vladimir) Putin price hike Americans are facing," Jen Psaki, the White House spokesperson, said in a statement about the initial contracts.

The contracts were awarded to 12 companies. They included 6.85 million barrels to Valero Marketing and Supply Company (VLO.N), 4.05 million barrels to Motiva Enterprises (MOTIV.UL), 3.6 million barrels to Exxon Mobil (XOM.N), 2.75 million barrels to Shell (SHEL.L), 2.6 million barrels to Glencore Ltd, 2.4 million barrels to Marathon Petroleum (MPC.N) and 2.5 million barrels to Phillips 66 (PSX.N).

While the record U.S. release of emergency oil and a subsequent release by countries in the International Energy Agency have put some pressure on global oil prices, they remain stubbornly above $100 a barrel as the European Union mulls a ban on Russian oil imports that would further restrict trade. Biden announced a ban on Russian energy imports in March. read more

The energy department had issued a second notice of sale for 30 million barrels of SPR crude oil earlier in April. Sixteen companies submitted a total of 126 bids for evaluation.

Combined with already-scheduled releases, these contracts mean that the SPR is now scheduled to deliver 50 million barrels of oil in May and June, the department said, adding it plans to issue a third notice of sale on May 24 for an additional 40 million barrels and for delivery starting in June.

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Reporting by Kanishka Singh and Timothy Gardner in Washington; Editing by Paul Simao and Grant McCool

Our Standards: The Thomson Reuters Trust Principles.

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