A logistical disruption in crude oil supply has prompted the U. S. Department of Energy(DOE) to authorize an exchange of up to one million barrels from the Strategic Petroleum Reserve(SPR) with ExxonMobil. The goal: to stabilize the flow of fuels to the Baton Rouge refinery and ensure supply in the region during a period of high demand.
Strategic Petroleum Reserve authorization
The exchange was approved following a disruption in marine supply that directly affected operations in Baton Rouge. This refinery is important for the fuel processing in the southeastern part of the country. Through this agreement, ExxonMobil will be able to partially resume operations while repaying the oil received with additional barrels, at no cost to taxpayers.
According to Energy Secretary Chris Wright, this action does not alter the federal government’s plans to continue replenishing the strategic reserve. As this is a temporary exchange, the borrowed volume will be returned along with a barrel premium, thus preserving the operating capacity of the emergency stockpile .
The Department of Energy is in constant communication with the main companies in the sector to respond quickly to any risk of shortages. In some cases, such as the closure of the Calcasieu Canal or the shutdown of the Keystone pipeline, precedents were set for this type of strategic measures.
The SPR remains an essential tool in the national security strategy. The measure is designed to respond to supply disruptions and ensure that the domestic market is not affected by logistical incidents. On this occasion, its temporary use seeks to mitigate impacts on the fuel refining and distribution chain in the Gulf Coast.
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Source and photo: DOE
