WASHINGTON, Aug 31 (Reuters) – The U.S. Energy Department on Thursday released 1 million barrels of oil from the Strategic Petroleum Reserve and a White House adviser said more could flow after Tropical Storm Harvey inundated Gulf Coast refineries and drove up motor fuel prices.
In the first tapping of the reserve for an emergency since Hurricane Isaac in 2012, two emergency exchanges of oil of 500,000 barrels will be delivered to the Phillips 66 refinery in Lake Charles, Louisiana, the department said.
That plant has not been hit by Harvey, which hammered Houston and the Gulf Coast with catastrophic flooding and shut about a quarter of U.S. refinery capacity.
The release of 1 million barrels is small compared with U.S. demand of nearly 20 million barrels per day. The move did not halt rapidly rising gasoline prices, which surged more than 13 percent on Thursday to a two-year high above $2 a gallon ahead of the high-demand Labor Day holiday.
An adviser to President Donald Trump told a White House briefing that more oil could be sprung from the SPR.
”I think we would be very comfortable tapping into that and providing that alleviated resource,” homeland security adviser Tom Bossert told reporters.
Under the exchange, 400,000 barrels of sweet crude and 600,000 barrels of sour crude oil will be sent via pipeline from an SPR cavern in Louisiana to the refinery. The government will lend the crude to Phillips 66, which is required to replace the oil at a later date.
The SPR, established in the early 1970s after the Arab oil embargo caused widespread fuel supply panics, contains 679 million barrels of oil, enough to meet total U.S. needs for 33 days, in heavily guarded underground caverns on the Texas and Louisiana coasts.