U.S. Releases 400,000 Barrels of Crude Oil From Strategic Petroleum Reserve to TotalEnergies

The U.S. Energy Department on Jan. 18 approved an exchange of 400,000 barrels of crude oil for release to TotalEnergies’ subsidiary Atlantic Trading and Marketing, the fifth in a series of loans from the US Strategic Petroleum Reserve, or SPR. The exchange program is intended to increase short-term crude supplies in hopes of reducing retail gasoline prices. The companies that are awarded SPR crude oil through the exchange will have to return the volume of crude oil received along with an additional amount, depending on the duration of time they hold the oil.

In November, President Biden announced the release of 50 million barrels of crude oil from the reserve in response to the highest oil prices experienced in seven years. As the global economy recovers from the COVID-19 pandemic, oil supply has not increased at pace to meet demand, prompting the release to address the mismatch between demand and supply. The release includes 32 million barrels that will eventually return to the reserve and another 18 million barrels as part of a sale previously authorized by Congress.

The latest exchange agreement puts the administration on track to loan out a total of 8.3 million barrels of crude from the SPR, out of 32 million barrels made available. The exchange program initially had a slow start when it began last month, but companies since then have signed more agreements as the potential profitability of taking out a long-term loan of crude from the SPR increased.

Previously on Jan. 12, DOE approved its fourth loan from the SPR to release 870,000 barrels of crude to Shell’s US trading division. ExxonMobil previously agreed to borrow 6.8 million barrels from the SPR through two different agreements. U.S.-based refiner Marathon Petroleum also signed an agreement to borrow 250,000 barrels of crude.

In December, the agency approved the first exchange of 4.8 million barrels for release to ExxonMobil, with withdrawals set to take place from the Bryan Mound, West Hackberry, and Bayou Choctaw SPR storage sites.

The current exchange agreements are separate from the administration’s recent outright sale of 18.1 million barrels from the SPR that were earlier awarded. In that sale, Valero bought 8.2 million barrels of crude, followed by Marathon Petroleum with 3.9 million barrels, and Saudi Aramco-owned Motiva with 3 million barrels. Trading firm Gunvor, U.S. refiner Phillips 66 and ExxonMobil purchased the remaining 3 million barrels in the sale.