The Trump administration plans to loan nearly one-third of the 1-million-barrel US emergency heating oil reserve in response to rising diesel prices linked to conflicts in Iran and Ukraine. This decision follows bipartisan pressure from senators to release heating oil because diesel prices have reached record highs above $6.50 per gallon due to Middle Eastern disruptions.
The government will decide if more oil needs to be released from the reserves. The Northeast Home Heating Oil Reserve has only been used once since Hurricane Sandy in 2012 and is located in New Jersey, Connecticut, Massachusetts, and Maine. Around one-third of homes in New England and half in Maine depend on heating oil.
The increasing costs of heating oil have become a major concern ahead of the upcoming elections, affecting Republican senators facing tight races. US Energy Secretary Chris Wright stated the administration is dedicated to reducing energy costs. There will be a bidding process for loans to fuel retailers and terminal holders to help areas with shortages.
In addition, the administration supports a natural gas pipeline project for shipping gas from Pennsylvania to New York and New England, although New York has blocked it for environmental reasons. The administration is also grappling with rising crude oil prices and has already agreed to loan from the Strategic Petroleum Reserve, which is at its lowest level since 1982.
With information from Reuters
