DOE Awards Contracts for 53.3M-Barrel SPR Exchange Amid Hormuz Closure

The U.S. Department of Energy issued new contracts on May 12 for exchanging 53.3 million barrels from Strategic Petroleum Reserve sites including Bayou Choctaw, with immediate deliveries and a 28% return premium (~15.1 million barrels), building on ~35 million barrels already delivered. This follows the May 11 announcement that nine firms, including Exxon and Phillips 66, secured 58% of a 92.5 million-barrel offer, adding to 80 million loaned this spring toward a 172 million-barrel U.S. share of a ~400 million-barrel IEA release. The actions counter Iran's Strait of Hormuz closure—handling 20% of global oil—and $4.52/gallon U.S. gasoline, pressuring prices bearishly despite risks.