WASHINGTON (Reuters) - The U.S. Department of Energy said on Friday it would lend additional oil of up to 3.5 million barrels from the nation’s emergency crude reserve to two energy companies along the Gulf Coast after Hurricane Harvey shut about a quarter of the country’s refining industry.
The release came in addition to an exchange of 1 million barrels on Thursday.
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 organization advises Western governments on energy policy.
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 lends crude to a company, which later replaces it and supplies the reserve with premium barrels as a form of interest.
Reporting by Timothy Gardner; Editing by James Dalgleish