The US Department of Energy is considering a plan to swap heavy Venezuelan crude for US medium sour crude to replenish the Strategic Petroleum Reserve (SPR).
Under the contemplated scheme, Venezuelan oil would be moved into storage tanks at an offshore oil terminal in Louisiana, after which it could be dispatched to refineries. As part of the exchange, companies supplying US medium sour sulfur crude would have the option of placing their barrels directly into SPR storage.
The US government has previously used oil-swap mechanisms to both release and acquire crude. In typical swap agreements, refiners temporarily draw crude from the reserve during supply disruptions or force majeure events, such as hurricanes, and subsequently return the full volume plus a premium in the form of additional barrels.
