WASHINGTON: The Trump administration plans to loan up to 315,000 barrels of heating oil from the US emergency reserve to help curb rising fuel prices amid diesel shortages linked to the wars in Iran and Ukraine, the Department of Energy said on Wednesday.
The move, first reported by Reuters, follows calls from senators in both major political parties to release fuel from the reserve. Diesel prices have climbed above $6.50 per gallon amid supply disruptions linked to the war involving Iran.
The department said it would assess whether further releases were needed.
Emergency Reserve to Supply Fuel by November 13
The Department of Energy said it would loan heating oil from storage sites in Maine, Massachusetts and Connecticut. Deliveries are expected to be completed by November 13.
The loans will be allocated through a competitive bidding process open to fuel retailers and terminal operators. The aim is to move supplies into areas facing shortages.
The Northeast Home Heating Oil Reserve holds about one million barrels of fuel. The United States has tapped the emergency stockpile only once since Hurricane Sandy struck the region in 2012.
The reserve serves an area where heating oil remains important for households. About one-third of homes in New England use heating oil, while the figure is roughly half in Maine.
US Energy Secretary Chris Wright said the administration was “committed to doing everything in our power to lower energy costs.”
Rising Fuel Costs Create Political Pressure
Higher heating oil prices have become a major issue ahead of the November 3 elections, particularly in closely contested Senate races.
Republicans are seeking to retain control of both chambers of Congress. In Maine, Republican Senator Susan Collins faces a difficult re-election contest.
New Hampshire’s open Senate seat is considered a toss-up between Democrat Chris Pappas and Republican John Sununu. In Alaska, Republican Senator Dan Sullivan faces a challenge from Democrat Mary Peltola.
US Also Backs Natural Gas Pipeline Project
The administration is also supporting the Constitution natural gas pipeline project, led by Williams Companies. The proposed pipeline would transport natural gas produced in Pennsylvania to homes in New York and New England.
This week, the US released up to $42 million in Cold War-era funding under the Defense Production Act for initial work on the project. New York has blocked the pipeline on environmental grounds.
Meanwhile, the administration is trying to contain crude oil prices that have risen amid the Iran war. It has already agreed to loan 172 million barrels of crude from the Strategic Petroleum Reserve.
The crude reserve, stored along the coasts of Texas and Louisiana, has fallen to its lowest level since 1982.
