U.S. announces emergency oil release after Hurricane Isaias

Hurricane Isaias knocked out approximately 72% of the Gulf’s crude production before making landfall late Friday, according to data from the U.S. Marine Minerals Administration. Daily crude oil production in the Gulf of America averages about 2.1 million barrels a day or approximately 14% to 15% of the nation’s total output.

“With this emergency exchange, the Energy Department is acting swiftly to help maintain refinery operations, limit disruptions to fuel supplies, and ensure American families and businesses continue to have access to affordable, dependable, and secure energy,” said U.S. Secretary of Energy Chris Wright.

The nation’s Strategic Petroleum Reserve, held primarily in underground salt caverns along the Louisiana and Texas coasts, began October with approximately 283 million barrels of oil, the lowest level since 1982. The United States was the world’s largest importer of crude oil in 1982, but in 2026 the country has become a major global exporter.

The exchange with ExxonMobil will accelerate deliveries of crude oil previously awarded as part of a 172-million-barrel release from the nation’s emergency reserve announced in March in response to supply disruptions caused by the U.S.-Israel conflict with Iran.

ExxonMobil’s refinery in Baton Rouge, Louisiana, the fourth-largest in the country, is capable of processing 523,500 barrels of crude oil daily. The Texas-based energy giant is the second largest producer of diesel fuel, accounting for roughly 12% of total U.S. refining capacity. The Plantation and Colonial pipeline systems carry refined products produced at the Baton Rouge refinery to consumers and military installations across the Southeast and near major cities such as Atlanta, Washington, D.C., Philadelphia and New York City.

It’s expected that London-based BP will trade its 2-million-barrel allotment to other Gulf Coast fuel producers in exchange for oil delivered nearer the company’s major U.S. refineries in the Midwest and Pacific Northwest.

Wright said that the emergency exchanges would protect the U.S. taxpayer. “In addition to helping minimize supply disruptions, these emergency exchanges will also require Exxon and BP to return more barrels to the Reserve than are currently being withdrawn, saving taxpayers millions of dollars,” he said.

The 172-million-barrel release from the Strategic Petroleum Reserve, began in April, are loans to be repaid in barrels of crude oil with 18% to 28% interest, but the reserve drains about six times faster than it can be refilled. Geologists warn that expanding and emptying the salt caverns too quickly can cause the saline walls to shift and collapse.

After the Department of Energy finalized a 40-million-barrel swap on Oct. 6, the nation’s stockpile of oil is expected to decline in the weeks ahead to 243 million barrels, dropping below the 252.4-million-barrel statutory minimum set by Congress in 1975.

Because all of the 176.4 million barrels in total allocations from the strategic reserve to refiners over the last five months is structured as an 'emergency exchange' with planned repayments instead of a permanent withdrawal, the 1975 statutory minimum does not apply.