Key facts
- The Energy Department said the loan covers 300,000 barrels, nearly a third of the 1-million-barrel reserve.
- Global Companies LLC, Sprague Operating Resources LLC, Trafigura Trading LLC and Vitol Inc are the four recipients, per the department.
- The companies must return the same amount of fuel oil plus a premium before next year's peak heating season, the department said.
- Fuel will be drawn from storage sites in Boston and New Haven, with transfers or deliveries due by November 6.
- The US has tapped the Northeast Home Heating Oil Reserve once since Hurricane Sandy struck the region in 2012.
The US Energy Department said on November 4 it would loan 300,000 barrels of fuel oil to four companies from the nation's emergency heating oil reserve, nearly a third of the 1-million-barrel stockpile. The department said the move was meant to counter rising prices before the onset of winter.
The offer, reported first by Reuters, followed calls from senators of both political parties for the administration to release heating oil from the reserve. Diesel, a fuel from the same refining stream, hit records above $6.50 per gallon on energy disruption across the Middle East caused by the Iran war, according to the report.
Fuel from the Northeast Home Heating Oil Reserve will be drawn from storage sites in Boston and New Haven, with transfers or deliveries scheduled to be completed by November 6, the Energy Department said. "These actions will help address supply chain disruptions and ensure Americans in the Northeast region stay warm while protecting the long-term readiness of the Northeast Home Heating Oil Reserve," Energy Department Under Secretary Kyle Haustveit said in a statement announcing the loan.
Under the contracts, Global Companies LLC, Sprague Operating Resources LLC, Trafigura Trading LLC and Vitol Inc will be required to return the same amount of fuel oil with an additional premium to ensure the reserve is refilled before next year's peak heating season, the department said.
The US has tapped the Northeast Home Heating Oil Reserve only once since Hurricane Sandy struck the region in 2012. The emergency stockpile is held at sites in New Jersey, Connecticut, Massachusetts and Maine. About one-third of New England homes use heating oil, and about half in Maine.