The US will buy oil for its emergency reserve using market prices, not fixed bids

The US Department of Energy has delayed a rule that would have forced it to buy oil for the Strategic Petroleum Reserve using fixed-price contracts. Instead, it will continue to use contracts tied to market index prices. This means the government will keep buying oil at whatever the market price is when it needs to refill the reserve.

The US government has been trying to refill its emergency oil reserve after selling off large quantities to stabilize prices. The previous plan was to lock in prices with fixed contracts, which would have given the government more certainty on costs. Sticking to market-indexed prices means the government will continue to be exposed to price volatility when it buys oil.