US to Lend 315,000 Barrels of Heating Oil From Emergency Reserve to Cap Winter Fuel Costs

The Energy Department said Wednesday the Trump administration will lend up to 315,000 barrels of heating oil from emergency reserves — nearly a third of the roughly 1 million barrels in stock — to curb fuel prices driven higher by diesel shortages linked to the Iran and Ukraine conflicts. US diesel prices have climbed above $6.50 a gallon, a record high, after the Iran war disrupted Middle East energy supplies. Because diesel and heating oil share the same refining process, bipartisan senators had urged the release. The department will assess whether further releases are needed, a source said. The oil will be lent from Maine, Massachusetts and Connecticut, with delivery due by November 13. Bidding will be open to fuel retailers and terminal operators to route supplies to shortage areas. Energy Secretary Wright said the government is committed to lowering energy costs. About a third of New England households use heating oil, and half in Maine, making price spikes a direct hit to living costs. The reserve has been tapped only once since Hurricane Sandy in 2012. Rising heating costs have become an issue in the November 3 midterm elections, with Republicans defending control of Congress. Maine Sen. Collins faces a tough reelection race, with New Hampshire and Alaska also in focus. The administration also backs Williams Cos.' (WMB) Constitution pipeline to move Pennsylvania gas to New York and New England, offering up to $42 million under the Defense Production Act for pre-construction work; New York has previously blocked the project on environmental grounds. The government has separately agreed to lend 172 million barrels of crude from the Strategic Petroleum Reserve, now at its lowest level since 1982.