DOE to make 30 million barrels of oil storage capacity available to producers

The U.S. Department of Energy (DOE) is working to immediately make 30 million barrels of the Strategic Petroleum Reserve’s (SPR’s) oil storage capacity available to oil producers hurt financially by the impacts of COVID-19 and the disruption of world oil markets.

Further, the DOE intends to make an additional 47 million barrels of storage capacity available thereafter.

The worldwide reduction in consumer demand caused by COVID-19 has forced U.S. refiners to dial back production of gasoline, commercial airline jet fuel, and other refined products. This has reduced refinery crude oil demand, exacerbated a market glut of globally produced oil, and increased the need for crude oil storage. That lack of storage is forcing the shut-in of oil wells and, in turn, hurting the U.S. energy industry.

The SPR can relieve some of this economic stress by making storage capacity available to U.S. oil producers immediately. President Donald Trump has directed the Secretary of Energy to fill the SPR to its maximum capacity.

“Filling the SPR with crude oil, produced by American companies that are facing catastrophic losses and increased financial hardship, is a logical action for the federal government to take as we work to overcome the economic disruptions caused by COVID-19 and intentional, global oil market disruptions,” U.S. Secretary of Energy Dan Brouillette said. “The Department continues to work with Congress to find ways to make funding available for DOE to buy American oil. However, we must move with a sense of urgency to support an industry that underpins the U.S. economy and supports our national security. Making some of the SPR’s storage capacity available to industry, without purchasing the oil, provides this immediate benefit to the industry and its hard-working employees.”

The SPR will receive up to 685,000 barrels per day, Assistant Secretary for Fossil Energy Steven Winberg said. The first crude oil deliveries are expected to arrive in late-April or early-May.