The U.S. Department of Energy announced on Wednesday, Sept. 3, that it will allow Citgo Petroleum Corp. to draw 250,000 barrels of oil from the Strategic Petroleum Reserve, citing oil supply disruption caused by Hurricane Gustav as the reason.
The DOE announced on Tuesday, Sept. 2, that it planned to grant the request it received from Citgo’s Lake Charles, LA, refinery for 250,000 barrels of oil. When Hurricane Gustav hit the region, the Calcasieu ship channel was closed. The waterway serves the various ports at Lake Charles. The closing of the channel blocked 100 percent of the oil output in the U.S. Gulf of Mexico.
Thirteen refineries, which produce an estimated 1 million barrels of oil per day, were closed in the Gulf Coast region. The DOE said Citgo, which is owned by the Venezuelan state oil company, is the only oil company to ask for supplies from the emergency reserves so far.
According to Reuters, Exxon has been in touch with the Energy Department about oil supply options, “including tapping the SPR,” and Shell Oil is “gauging its need for crude oil after Gustav, but it had not asked for any SPR oil yet.”
Currently, more than 700 million barrels of oil are being stored in the underground caverns along the Texas and Louisiana Gulf Coast, according to the DOE Web site.
In July 2008, when the price of crude oil soared to more than $147 per barrel, President George W. Bush rejected lawmakers’ suggestions that the government dip into the strategic reserve to help consumers combat record-high gasoline and fuel prices.
The price for a barrel of crude oil was down to about $109 by the end of trading on Tuesday, Sept. 2, after oil companies reported that the damage to their platforms, rigs and equipment caused by Hurricane Gustav was less extensive than from Hurricanes Katrina and Rita in 2005.