The US Department of Energy has authorised the release of up to 4 million barrels of crude from the Strategic Petroleum Reserve to offset supply disruption caused by Hurricane Isaias.
Under the emergency exchange, announced on Saturday, October 10, ExxonMobil and BP America can each receive up to 2 million barrels to keep their refineries running, Energy Secretary Chris Wright said. This is a loan rather than a sale: both companies must return the crude to the reserve in 2027, along with an additional premium amount.
Isaias made landfall in Florida on Friday, October 9, as a Category 2 hurricane. Staff were evacuated from 129 production platforms, about a third of the facilities in the Gulf of Mexico, and more than two-thirds of Gulf oil production, almost 1.5 million barrels a day, was shut in as a precaution. Chevron, BP and Shell were among the companies that closed platforms.
Industry experts said the storm could still push fuel prices higher if power outages shut refineries, though some expected any effect on gasoline prices to be small and mostly regional.
The exchange adds to an already heavy drawdown. Since the US and Israel launched strikes on Iran in late February, 132 million barrels have been withdrawn from the 415 million barrels that were in the reserve, leaving it at its lowest level since 1982. Washington has pledged to release a total of 172 million barrels over time.
What to watch: how quickly Gulf platforms restart once the storm passes, whether other refiners request exchanges, and how the 2027 repayments fit with plans to rebuild the reserve.
Free daily energy briefing at 9:00 AM IST. Unsubscribe anytime. Privacy