Energy Department Loans 300,000 Barrels From Northeast Heating Oil Reserve

Four fuel companies will borrow 300,000 barrels of heating oil from the federal Northeast Home Heating Oil Reserve, the Energy Department announced Wednesday, with deliveries from storage sites in Boston and New Haven, Connecticut, due to wrap up by Nov. 6.

The loan equals nearly a third of the 1-million-barrel emergency reserve, Reuters reported.

Who gets the fuel

The contracts went to Global Companies LLC, Sprague Operating Resources LLC, Trafigura Trading LLC and Vitol Inc., according to the department. Each must return the same volume of fuel oil plus a premium so the reserve is refilled before the 2027-2028 heating season.

“These actions will help address supply chain disruptions and ensure Americans in the Northeast region stay warm,” Energy Under Secretary Kyle Haustveit said in a statement quoted by Reuters.

Prices behind the request

Senators from both parties had urged the administration to tap the reserve after diesel, which comes from the same refining stream as heating oil, topped $6.50 a gallon for record highs amid Middle East energy disruptions tied to the Iran war, Reuters reported.

Maine Sens. Susan Collins and Angus King asked for the release in a Sept. 22 letter. Collins’s office said heating oil costs were up more than 70% from a year earlier and that the release would add about 13% to New England’s supply.

The department first sought bids on Oct. 21 for up to 315,000 barrels, including fuel stored in South Portland, Maine. The awarded volume comes only from the Boston and New Haven sites. Energy Secretary Chris Wright called the exchange “a temporary measure to solve a temporary supply disruption” when the solicitation opened.

Sources: U.S. Department of Energy, Reuters, Office of Sen. Susan Collins.