The U.S. Department of Energy will lend 1 million barrels of oil to Marathon Petroleum Corp. after the company requested it because of impacts related to Hurricane Isaac.
The government will lend the barrels from a Strategic Petroleum Reserve site in Louisiana.
Marathon will have to return the same quantity of oil within three months, plus additional “premium barrels,” which the department described as “similar to interest.”
The department said a loan is different from a release of the reserves, which the White House has said was an option if Isaac disrupted oil supplies and markets.
The reserves could begin delivering the barrels today, the department said.
“Today’s announcement is part of the broader federal effort to respond to those impacted by Hurricane Isaac,” U.S. Energy Secretary Steven Chu said in a statement. “This emergency loan from the Strategic Petroleum Reserve will help ensure Marathon’s refining operations have the crude oil they need to continue operating.”
Marathon Petroleum Corp. began shutting down its Garyville, La., refinery Monday, one of the largest in the nation. The facility has a capacity of 490,000 barrels a day. It was running at reduced rates because of the storm.
Chu said the government’s oil loan will include 1 million barrels of sweet crude.