WASHINGTON (Reuters) - The U.S. Department of Energy said on Thursday that it was releasing a total of 1 million barrels of oil from the nation’s emergency crude reserve in two equal batches to a Phillips 66 (PSX.N) refinery in Louisiana after Tropical Storm Harvey shut refineries on the U.S. Gulf Coast.
The U.S. Strategic Petroleum Reserve (SPR), a series of underground caverns in Louisiana and Texas operated by the Department of Energy, holds 678.9 million barrels of crude, enough to meet total U.S. needs for 33 days.
The United States also has a gasoline reserve, created after Hurricane Sandy in 2012. The Northeast Gasoline Supply Reserve holds about 1 million barrels, stored in New York Harbor, Boston and Maine.
The International Energy Agency’s 29 member countries also store petroleum, which can be made available in case of a supply disruption. The Paris-based organisation advises Western governments on energy policy.
The IEA members’ reserves include both crude and refined products, which can be deployed in response to an international disruption.
The Gulf Coast is a major exporter of refined products to Latin America and other regions, and any serious hurricane damage to the region can have an impact on global supply.
Releases from reserves can help avoid or moderate any price spikes by bolstering supply that would otherwise be interrupted.
The U.S. president can call for an emergency drawdown from the SPR if the country is confronted with an economically threatening supply disruption. That was the case after Hurricane Katrina in 2005, which shuttered major U.S. oil producers and refiners.
The SPR can also release oil in an exchange agreement, in which it loans crude to a company, which later replaces it and supplies the reserve with premium barrels as a form of interest.
Reporting by Timothy Gardner and Jessica Resnick-Ault in New York; Editing by Lisa Von Ahn and Tom Brown