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Oil in Global Economy Series: U.S. makes emergency release from SPR to battle Harvey fall out

United States department of energy has authorized the release of half a million barrels of crude oil from Strategic Petroleum Reserve (SPR) in the wake of the disaster caused by Hurricane Harvey in Texas and some parts of Louisiana. The storm that battered Texas coast with winds and torrential rains have taken down refining capacity in the tune of 3.9 million barrels per day, leading to a severe shortage of gasoline. The U.S. department of energy (DoE) said in a statement that energy secretary Rick Perry has authorized the release of half a million barrels of crude to Phillip66’s refinery in Louisiana which is in operation but suffering a shortage of crude oil in the wake of the disaster.

The decision will authorize 200,000 barrels of sweet crude oil and 300,000 barrels of sour crude oil to be delivered from SPR’s West Hackberry site to the Phillip66’s refinery and the statement said that more assistance will be provided if necessary. The lack of refining capacity operational on the Gulf Coast is spreading supply fears to other markets, with the Colonial Pipeline, which is the largest conduit of refined fuel from the Gulf Coast to major east coast cities is in the process of shutting down its major lines.

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