US lend Exxon another 1.5 million barrels of oil from emergency reserves

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A logo of Exxon Mobil Corp can be seen at the Rio Oil and Gas Expo and Conference in Rio de Janeiro, Brazil, September 24, 2018. REUTERS / Sergio Moraes

WASHINGTON, Sep 9 (Reuters) – The US Department of Energy announced Thursday that it had a second loan of 1.5 million barrels of oil from the Strategic Petroleum Reserve (SPR) to Exxon Mobil Corp (XOM.N) following the damage Offshore oil production has been approved by Hurricane Ida.

“The SPR’s ability to perform an exchange is an important tool available to refiners to strengthen the fuel supply chain and mitigate disruption following emergencies like Hurricane Ida,” the department said on its website after receiving the additional loan to Exxon’s Baton Rouge Refinery.

Exxon is shipping the oil to the refinery at 520,000 barrels a day, “which will help us fully restore operations and continue to fuel the affected area,” said Julie King, a company spokeswoman. The plant resumed normal operations earlier in the day.

The Department of Energy has now approved loans totaling 3.3 million barrels to help refineries address the shortage of oil from the US Gulf.

Last Thursday, US Secretary of Energy Jennifer Granholm approved the first loan to Exxon’s Baton Rouge. On that day, it also loaned 300,000 barrels of oil to the Placid Refining Company LLC refinery near Baton Rouge. Continue reading

Three-quarters of US oil production in the Gulf of Mexico remains offline after Ida hit land over a week ago. Ida was one of the worst hurricanes for oil producers since consecutive storms in 2005.

Royal Dutch Shell Plc (RDSa.L), the largest oil producer in the U.S. Gulf of Mexico, canceled some export shipments Thursday due to Ida’s damage to offshore assets, suggesting the energy losses would continue for weeks.

Power outages at onshore processing and pipeline facilities prevented some crude oil from reaching land, which has been supporting oil prices since last week.

The SPR had 621.3 million barrels of crude oil in stock last week, the lowest since August 2003, according to the Department of Energy.

The SPR has four large reservoirs, two in Texas and two in Louisiana, to supply crude oil to nearby refineries for fuel production. It was developed in the 1970s after the Arab oil embargo drove up gasoline prices, but has recently been tapped following unusual fuel disruptions like hurricanes.

Reporting by Timothy Gardner; Arrangement by Sandra Maler, Chris Reese and Himani Sarkar

Our Standards: The Thomson Reuters Trust Principles.



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