Latest news with #StrategicPetroleumReserve
Reuters
7 days ago
- Business
- Reuters
Exxon restarts purchases of Mars crude after brief pause over zinc issues, sources say
HOUSTON, July 16 (Reuters) - Oil major Exxon Mobil (XOM.N), opens new tab bought Mars crude for August delivery, two sources said on Wednesday, after briefly halting purchases of the flagship offshore grade due to a zinc contamination issue. The zinc contamination in the Mars crude oil stream had pushed Exxon to borrow up to 1 million barrels of crude oil from the Strategic Petroleum Reserve for its Baton Rouge refinery in Louisiana. The start-up of an offshore well caused the zinc contamination in Mars crude, Chevron (CVX.N), opens new tab said last week. Chevron was actively working to resolve the issue, the company said on Tuesday. Exxon and Chevron did not immediately reply to requests for comment on Wednesday. The crude grade was trading at a 30-cent discount to U.S. crude at the Cushing, Oklahoma, hub, due to the persistent quality issue. That compared with a $1 premium at the end of June.
Yahoo
12-07-2025
- Business
- Yahoo
Chevron says offshore well start-up caused Mars crude quality issues
By Arathy Somasekhar HOUSTON (Reuters) -The start-up of an offshore well caused zinc contamination in Mars crude, Chevron said on Friday, leading to the tightening crude oil supply in the key Gulf Coast refining hub and the government releasing barrels from its emergency stockpile. Inventories of crude oil along the U.S. Gulf Coast had fallen to their lowest seasonally in seven years at the end of last week, thanks to recent wildfires in Canada that cut supplies and cancellations of licenses that allowed for U.S. import of Venezuelan crude. The U.S. Department of Energy on Friday said it would provide up to 1 million barrels of crude oil from the Strategic Petroleum Reserve to Exxon Mobil's Baton Rouge refinery in Louisiana, citing an offshore supply disruption. Exxon told its trading counterparts that it will not buy the Mars crude oil grade until the zinc contamination issue is fixed, Reuters reported on Thursday. The oil major requested the barrels from the SPR after the zinc contamination was identifiecrud in Mars crude, two sources familiar with the matter said. Mars, a medium sour crude produced off the coast of Louisiana, is preferred by refineries along the Gulf Coast because of its properties and proximity. Refiners are typically configured to run certain grades of oil for ideal yields of different types of fuels. Switching to other crude grades can be operationally challenging and limit production, shrinking margins. The exchange of oil was authorized to help maintain stable regional supply of transportation fuels across Louisiana and the broader Gulf Coast, the DOE said, adding that the exchange will not impact or delay the department's ongoing efforts to refill the reserve. Exxon will resupply the crude, along with additional barrels to the SPR, the department added. Exxon declined to provide additional details. Zinc does not typically occur naturally in crude oil and industry sources said they worried that running crude with zinc could cause damage to refining units and to catalysts used in processing oil. TIGHT SUPPLY, STRONG DEMAND The Mars crude stream is a mix of oil from various platforms off the Gulf Coast. About 575,000 barrels per day of oil move on the Mars system to the coast, according to research firm Energy Aspects. Prices for Mars traded on Friday at a 15-cent a barrel premium to U.S. crude at the Cushing, Oklahoma, hub. It had eased to as little as a 10-cent discount earlier in the week, compared with a $1 premium at the end of June. Chevron said it was working to resolve issues and it does not expect an impact to current production guidance. Supplies of medium and heavy crude oil along the U.S. Gulf have tightened in recent months as Washington in late May terminated a group of licenses that had authorized partners of oil company PDVSA to take Venezuelan crude bound for U.S. and European refineries. Declining oil production in Mexico has also reduced exports to the U.S., while the recent wildfires in Canada also cut supplies that are usually imported. The opening of the expanded Trans Mountain pipeline last year has also redirected some Canadian oil flows to China and the U.S. West Coast, rather than the U.S. Gulf Coast. Meanwhile, demand for refined products, including gasoline and distillates, rose to 20.9 million bpd last week, the highest seasonally in five years thanks to strong driving demand.
Reuters
11-07-2025
- Business
- Reuters
US OKs exchange with Exxon Mobil to aid Gulf Coast supplies
WASHINGTON, July 11 (Reuters) - The U.S. Energy Department on Friday said it would provide up to 1 billion barrels of crude oil from the Strategic Petroleum Reserve to help support ExxonMobil's (XOM.N), opens new tab efforts to restore refinery operations as part of an SPR exchange. "ExxonMobil will return the borrowed crude along with additional barrels of crude oil for the SPR at no cost to the taxpayer," the department said in a statement.
Zawya
11-07-2025
- Business
- Zawya
Trump's flip-flop on emergency oil reserves has its merits: Bousso
(The opinions expressed here are those of the author, a columnist for Reuters.) LONDON - U.S. President Donald Trump's signature budget bill slashed funding for refilling U.S. emergency oil reserves, violating his previous vow to fill them "right to the top". This about-face raises the question of whether the U.S. still needs the Strategic Petroleum Reserve at all. The American SPR is the world's largest emergency oil storage, able to hold 714 million barrels, or the equivalent of 35 days of U.S. oil consumption, when full. But it contained only 403 million barrels of crude oil as of July 4, according to government data, which is far below the record level of 727 million barrels reached in 2010. SPR levels dropped to a 40-year low of 347 million barrels in July 2023 after Trump's predecessor Joe Biden carried out several SPR sales to ease rising oil prices, including releasing 180 million barrels in 2022 after Russia's invasion of Ukraine sparked concerns about a global energy shortage. Filling the SPR to capacity would cost over $21 billion at current benchmark U.S. crude prices and take years to accomplish. Yet, the so-called "Big Beautiful Bill" that Trump signed into law on July 4 reduced planned spending on SPR repurchases to $171 million between 2025 and 2029, from $1.3 billion in an earlier iteration of the bill, with another $218 million earmarked for maintenance. Trump said on July 1 that he still plans to fill the SPR once market conditions are right, and Congress could theoretically allocate more funds towards oil purchases. But does the United States actually need to fill up its vast oil reserves? The answer is probably no, given the seismic changes the country's energy sector has undergone in recent years. NET EXPORTER The SPR was established under President Gerald Ford in 1975 to deal with supply disruptions in response to the oil embargo that Arab members of the Organization of the Petroleum Exporting Countries imposed on Western governments supporting Israel in the 1973 Yom Kippur War. The supply rupture led to severe fuel shortages and a quadrupling of oil prices. The birth of the SPR coincided with the founding of the International Energy Agency in 1974, with the aim of coordinating Western governments' energy security, including through a collective action mechanism to respond to supply disruptions. The IEA requires member states, which include the United States, to hold at least 90 days of net imports of crude oil and refined products in strategic reserves, but countries that export more oil than they import are not required to hold reserves. And the United States, the world's top oil consumer, became a net exporter of crude and refined products in October 2019 for the first time since at least 1973. This historic shift was due largely to the rapid growth in onshore shale drilling activity in the U.S., which made the country the world's top oil producer in 2018. U.S. crude output is set to reach a record high of 13.5 million barrels per day this year, according to IEA figures. Meanwhile, exports of U.S. crude and refined products, such as gasoline and diesel, both set new record highs in 2024, reaching 4.1 million bpd and 6.6 million bpd, respectively, according to the IEA. That put U.S. net exports of crude oil and fuels at 2.3 million bpd in 2024. 'RIGHT TO THE TOP'? Even though the United States, as a net exporter of oil, is no longer required to hold reserves, it is unlikely to completely forgo its emergency energy stash. First, the country continues to import significant volumes of crude oil, largely due to quality requirements. It imported 6.6 million bpd last year, with over half coming from Canada. The U.S. also imports refined products for areas with limited refining capacity. Additionally, reserves can still play a critical role in times of domestic and international crisis, as was seen most recently in 2022, and the scale of the federally owned oil stocks, "makes it (the SPR) a significant deterrent to oil import cutoffs and a key tool in foreign policy," according to the SPR government website. Holding the SPR may also be seen as a sign of national pride and projection of U.S. power as part of Trump's vision of American energy dominance. However, the country's ample domestic crude production, extensive refining operations and declining reliance on fuel imports mean that Trump and future administrations no longer need to be in any hurry to fill emergency storage to the brim. The scale of buying and selling involved in managing the huge storage facilities has been a central feature of global energy markets. Reducing the size of America's SPR could therefore have a profound impact on oil prices. Enjoying this column? Check out Reuters Open Interest (ROI),your essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis. Markets are moving faster than ever. ROI can help you keep up. Follow ROI on LinkedIn and X. (Ron Bousso Editing by Marguerita Choy)
Reuters
01-07-2025
- Business
- Reuters
US Senate budget bill slashes money to fill oil reserve
WASHINGTON, July 1 (Reuters) - The budget bill passed by the U.S. Senate on Tuesday slashes the amount of money available to replenish the Strategic Petroleum Reserve even though President Donald Trump vowed on his first day in his second term to fill it "right to the top". Former President Joe Biden conducted several sales from the SPR including 180 million barrels, the most ever, after Russia invaded Ukraine. The sales left the SPR at its lowest level in 40 years, when the U.S. was far more dependent on oil imports. The budget bill slashed the amount of money for crude oil purchases to replenish the SPR to $171 million from $1.3 billion. That's only enough to buy about 3 million barrels instead of 20 million barrels at today's prices. Rapidan Energy, a consultancy group, told clients in a note that the funding was hit by the Senate's struggle to find budget cuts elsewhere as it softened some of the cuts to green energy in a version of the House bill. The bill now heads to the U.S. House, but it was unclear when lawmakers there would vote. Trump said on Tuesday that he plans to fill up the SPR when the market conditions are right, but it was unclear when or how. Even deliveries of oil to the SPR that were scheduled after Biden bought back some crude last year are as much as seven months delayed. Biden scheduled 15.8 million barrels of deliveries to the SPR from January through May. So far, only 8.8 million of that has been delivered to the reserve, a situation the Trump administration blamed on maintenance. The Senate bill kept a measure to cancel 7 million barrels in congressionally-mandated sales. Lawmakers could cancel further mandated sales in legislation later in the year. The SPR has nearly 403 million barrels, far less than the 727 million barrels it held in 2009, the most ever. It is still the world's largest emergency reserve of oil. The U.S. hit record oil output under Biden, production Trump is looking to expand.
