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The U.S. Department of Energy has authorized the exchange of as many as 1M barrels from the Strategic Petroleum Reserve to ease the crude shortage at Exxon Mobil’s (NYSE:XOM) Baton Rouge, Louisiana, refinery after quality problems with the Mars crude grade emerged last week, OilPrice.com reported Monday.
Energy Secretary Wright said he authorized the action to help maintain a stable regional supply of transportation fuels across Louisiana and the broader Gulf Coast.
Exxon (NYSE:XOM) reportedly warned suppliers last week of “serious quality issues” related to elevated levels of zinc in crude supplied by the Mars pipeline, which brings crude ashore from a series of deepwater fields in the Gulf of Mexico, and would stop accepting Mars crude “in an effort to avoid further damages.”
Chevron (CVX), one of the producers that contributes crude to the Mars pipeline, said it “identified a potential contributing source to the Mars crude composition changes, which is associated with the start-up of a new well,” and is working to resolve the matter, which is not expected to affect production guidance.
Mars is a major part of the Gulf of Mexico oil ecosystem, delivering ~600K bbl/day of crude to refiners.