US To Release Heating Oil Reserve In Northeast To Lower Prices

Authored by Jack Phillips via The Epoch Times,

The U.S. Department of Energy has announced it will offer a heating oil exchange in a bid to lower costs ahead of the winter as the war in Iran continues.

In a statement released on Wednesday, the department announced a proposal request for an exchange of up to 315,000 barrels of ultra-low sulfur distillate, a refined oil product used for home heating. Ultra-low sulfur distillate uses the same specification as most types of diesel, which has experienced high prices in recent days.

“This solicitation is structured to mitigate supply chain challenges disrupting fuel oil supply,” the department said, adding the move is designed to keep the Northeast Home Heating Oil Reserve stocked ahead of the winter months.

“The Trump administration is committed to doing everything in our power to lower energy costs for the American people,” said U.S. Secretary of Energy Chris Wright said in a statement.

According to the Energy Department, the terms of the exchange mean that borrowing companies have to “return the same volume of fuel oil” and include a premium back to the Northeast Home Heating Oil Reserve.

After receiving letters from the two Maine U.S. senators, Wright said he then directed his agency to exchange barrels of fuel from the oil reserve to mitigate high heating oil costs.

“Of course, this is a temporary measure to solve a temporary supply disruption. I encourage the governors of New York and New England to work with the Trump Administration to build the Constitution Pipeline and replace home heating oil with low-cost natural gas,” he said. “Doing so would save their residents billions of dollars in home heating and electricity costs.”

Sen. Susan Collins (R-Maine) wrote in a post on X that the move equals a roughly 13 percent supply increase for New England, essentially pushing down the northeastern United States’ heating oil costs this winter.

The Energy Department’s announcement added that it will loan the hundreds of thousands of barrels of heating oil from Connecticut, Maine, and Massachusetts. The deliveries will be completed by Nov. 13.

According to the American Automobile Association (AAA), the average retail price of diesel has remained over $6 per gallon for weeks. From Tuesday to Wednesday, the price for diesel remained virtually unchanged in the United States, standing at $6.31 per gallon.

Diesel hit a record high of $6.52 per gallon on Sept. 22, the AAA figures show. Those figures also show that regular gasoline dropped about 1 cent on Wednesday to $4.26 per gallon.

Oil prices have hovered around $100 per barrel for months now, with international Brent crude reaching $108 and U.S. West Texas International reaching $97, respectively, per barrel on Wednesday.

In an effort to control crude oil prices that have risen due to the war with Iran and amid the Russia-Ukraine conflict, the Trump administration in March agreed to loan 172 million barrels of crude from the Strategic Petroleum Reserve, located in Louisiana and Texas. Currently, the reserve has dropped to 282 million barrels, the lowest levels seen since the 1980s.

President Donald Trump also indicated that his administration may move to permanently allow E-15 gasoline, which is blended with 15 percent ethanol instead of the regular 10 percent, to be used all year long. Normally, some states bar its usage during the summer months.

During a rally in Kansas on Monday, Trump said he would initiate the move if Sen. Roger Marshall (R-Kan.) wins his reelection bid during the midterms next month.