The US Department of Energy (DOE) has authorised the exchange of crude oil to Exxon Mobil from the Strategic Petroleum Reserve (SPR) to address fuel shortages in the wake of Hurricane Ida.
The approval allows the release of 1.5 million barrels of crude oil to ExxonMobil’s Baton Rouge refinery in Louisiana.
According to the Energy Department, the crude loan would help in alleviating potential logistical issues to move crude oil within hurricane-affected areas while promptly ensuring access to fuel for the region.
White House press secretary Jen Psaki said that the crude exchange will address supply disruptions while providing crude access to the Louisiana refiners needed to continue their operations. It also marks the first exchange from the SPR in four years.
Psaki said: “This action is the latest step the president has taken to secure energy supplies and relieve price pressures in the region.
“This week, the Department of Transportation provided new flexibilities for truck drivers to enable them to deliver fuel, the EPA issued waivers that expand the supply of fuel, and the IRS waived the penalty for the use of dyed-diesel fuel on highways in the affected region in order to expand the availability of diesel for use on Louisiana roads at a critical time for response and recovery efforts.”
However, Exxon Mobil is required to pay back the crude with interest to the SPR within two to three months, reported Bloomberg.
The world’s largest supply of emergency crude oil, SPR aims to reduce the impact of potential petroleum supply disruptions.