DOE Authorises a 4 Million Barrel Strategic Petroleum Reserve Exchange for ExxonMobil and BP After a Gulf Hurricane

The Energy Department has authorised an emergency exchange of up to 4 million barrels from the Strategic Petroleum Reserve, up to 2 million each to ExxonMobil and BP America. DOE said the oil would address supply disruptions from “inclement weather in the Gulf of America.” It didn’t name the storm; Hurricane Isaias came ashore in the Florida Panhandle on 9 October.

The barrels are a loan. The companies return them in 2027 with extra “premium” barrels, “at no additional cost to taxpayers,” DOE said. ExxonMobil’s portion speeds up delivery of reserve crude it had already been awarded. Energy Secretary Chris Wright said the department “is acting swiftly to help maintain refinery operations.”

How exchanges work

The reserve, held in salt caverns in Texas and Louisiana, can be used in three ways: emergency sales ordered by the President, sales Congress mandates to raise money, and exchanges, where DOE lends crude to refiners whose supply is disrupted. Exchanges are common after hurricanes, when tankers can’t reach Gulf ports or pipelines shut. They keep refineries running without depleting the reserve permanently.

DOE also issued a request for proposals on 29 September for another exchange tied to what it called global supply stability commitments.

Why it matters now

The exchange comes during the worst fuel price squeeze in years. The war with Iran has cut shipping through the Strait of Hormuz by about 40%, Brent crude rose above $105 on 12 October, and diesel averages about $6.27 a gallon. The administration has also licensed Russian diesel imports, drawing bipartisan objections in the Senate that the move breaks a 2022 ban.

A refinery outage on the Gulf Coast would push diesel and gasoline prices higher just before the 3 November election. A loan of 4 million barrels, less than half a day of US oil consumption, is small, but it targets the refineries that supply much of the Southeast.

The reserve’s level

The reserve held about 400 million barrels in 2025, well below its 714 million barrel capacity, after large sales in 2022 and mandated sales since. Exchanges with premium returns add a little each time. Whether the administration turns to emergency sales, if the war drags on and prices keep rising, is the bigger question for the winter.