US lends Exxon an additional 1.5 million barrels of oil from emergency reserve
WASHINGTON, Sept. 9 (Reuters) – The US Department of Energy on Thursday announced it had approved a second loan of 1.5 million barrels of oil to Exxon Mobil Corp (XOM.N) from the Strategic Petroleum Reserve (SPR ) after the damage caused by Hurricane Ida. offshore oil production.
“The ability of the SPR to conduct exchanges is a critical tool available to refiners to strengthen the fuel supply chain and mitigate disruption following emergencies, such as Hurricane Ida,” the department said on its website after authorizing the additional loan to the Exxon refinery in Baton Rouge.
Exxon transports the oil to the refinery at 520,000 barrels per day, “which will help us fully restore normal operations and continue to provide fuel to the affected area,” said Julie King, a spokesperson for the company. The factory resumed normal operations earlier today.
The Department of Energy has now authorized loans totaling 3.3 million barrels to help refiners cope with the oil shortage from the US Gulf.
Last Thursday, U.S. Energy Secretary Jennifer Granholm authorized Exxon’s first Baton Rouge loan. That day, it also loaned 300,000 barrels of oil to the Placid Refining Company LLC refinery near Baton Rouge. Read more
Three-quarters of U.S. oil production in the Gulf of Mexico remains offline after Ida made landfall more than a week ago. Ida was one of the worst hurricanes for oil producers since the back-to-back storms of 2005.
Royal Dutch Shell Plc (RDSa.L), the largest Gulf of Mexico oil producer in the United States, on Thursday canceled some export shipments due to Ida’s damage to offshore facilities, reporting losses of energy would go on for weeks.
Power outages at onshore processing and pipeline facilities have prevented some of the crude from reaching shore, which has supported oil prices since last week.
The SPR had 621.3 million barrels of crude in stock last week, according to the Energy Department, the lowest since August 2003.
SPR has four major storage facilities, two in Texas and two in Louisiana, to deliver crude to neighboring refineries for fuel production. It was developed in the 1970s after the Arab oil embargo pushed up gasoline prices, but has been in operation recently after unusual fuel disruptions like hurricanes.
Reporting by Timothy Gardner; Editing by Sandra Maler, Chris Reese and Himani Sarkar
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