Chevron, Exxon Mobil and Alon USA, along with six other companies, have agreed to rent space to store 23 million barrels of crude in the US emergency oil reserve. The move comes as the Trump administration tries to help the industry deal with crashing oil prices.

In March, President Donald Trump ordered Energy Secretary Dan Brouillette to fill the reserve, which has about 77 million barrels of free space, “to the top”. But an initial plan to buy about 30 million barrels fell through after the US Congress declined to fund the purchase.

The Department of Energy, (DoE), said on April 2 it would offer oil companies 30 million barrels of space in the Strategic Petroleum Reserve (SPR). Later in the month, it said companies were in contract negotiations for only 23 million barrels of space.

The SPR website said 1.1 million barrels of sour crude oil had been moved to the facility in April and the reserve currently holds 636.1 million barrels. It has a capacity of about 714 million barrels, making it roughly 90 per cent full.

The other companies leasing space in the reserve are Atlantic Trading, Energy Transfer, Equinor Marketing & Trading (US), Mercuria Energy America, MVP Holdings, LLC and Vitol, Inc. The US official provided the list on condition of anonymity.

The DoE has said it is continuing to work with Congress on finding ways to fund a purchase of oil for the reserve and could initiate more plans to lease space in the facility.

Companies storing oil will be allowed to keep it in the SPR through March 2021 and will pay a small amount of oil to cover storage costs, the department said earlier this month. Most oil deliveries will be received in May and June, with some shipments in April.

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4th May 2020