The United States has authorised the release of up to four million barrels of crude oil from its Strategic Petroleum Reserve to offset supply disruptions caused by Hurricane Isaias in the country's southeast, as storm damage and earlier wartime drawdowns leave the stockpile at its lowest level in more than four decades.
Emergency exchange for refiners
As part of an "emergency exchange", ExxonMobil and BP American can each receive up to two million barrels to help maintain refinery operations, Energy Secretary Chris Wright was quoted as saying in a statement reported by AFP. The two oil companies will be required to return the crude to the reserve in 2027, contributing a premium amount beyond what was borrowed, the Department of Energy said.
Storm shuts in Gulf production
Isaias made landfall in Florida on Friday as a Category 2 hurricane, severely disrupting oil production along the US Gulf coast. Reuters reported that oil companies shut more than 70 per cent of crude production in US waters as the storm approached, sending oil prices higher on Friday: Brent crude futures settled at USD 104.72 a barrel, while West Texas Intermediate finished at USD 91.85.
Stockpile already at 1982 lows
The reserve has already been heavily tapped since the US war with Iran shocked energy markets, with AFP reporting that the backstock has reached its lowest level since 1982. Since the US and Israel launched strikes on Iran in late February, 132 million barrels have been withdrawn from the 415 million in reserve, and Washington has pledged to gradually release 172 million barrels.
Sources:
ET Now — Hurricane Isaias: US releases 4 million barrels of crude oil for ExxonMobil, BP (via AFP)
Emergency exchange for refiners
As part of an "emergency exchange", ExxonMobil and BP American can each receive up to two million barrels to help maintain refinery operations, Energy Secretary Chris Wright was quoted as saying in a statement reported by AFP. The two oil companies will be required to return the crude to the reserve in 2027, contributing a premium amount beyond what was borrowed, the Department of Energy said.
Storm shuts in Gulf production
Isaias made landfall in Florida on Friday as a Category 2 hurricane, severely disrupting oil production along the US Gulf coast. Reuters reported that oil companies shut more than 70 per cent of crude production in US waters as the storm approached, sending oil prices higher on Friday: Brent crude futures settled at USD 104.72 a barrel, while West Texas Intermediate finished at USD 91.85.
Stockpile already at 1982 lows
The reserve has already been heavily tapped since the US war with Iran shocked energy markets, with AFP reporting that the backstock has reached its lowest level since 1982. Since the US and Israel launched strikes on Iran in late February, 132 million barrels have been withdrawn from the 415 million in reserve, and Washington has pledged to gradually release 172 million barrels.
Sources:
ET Now — Hurricane Isaias: US releases 4 million barrels of crude oil for ExxonMobil, BP (via AFP)
