Expecting shortages, Citgo requests crude from U.S. reserves

Citgo Petroleum Corporation sent a formal request Sept. 14 to the Strategic Petroleum Reserve for 1 million barrels of crude oil.

The company said in a press statement that crude delivery has been “severely curtailed” after hurricanes Gustav and Ike struck the Gulf Coast region.

Citgo, which is based in Houston, is owned by Venezuela’s national oil company. It is only one of two refineries operating in the Gulf Coast region after the hurricanes.

“Citgo’s request for SPR crude is an effort to alleviate potential fuel shortages in the United States,” the press released stated.

Worries of a severe gas shortages and further hike in prices at the pump as a result of the storms are widespread. Analysts say Ike has triggered the biggest disruption to U.S. energy supplies in at least three years.

Texan oil refineries put out of action by the storm could take up to nine days to recover.

In an interview with CBS, Sen. Kay Bailey Hutchison said she had been told by officials at the Federal Emergency Management Agency (FEMA) that the facilities were 'pretty much down.”

'We are looking at another week or eight or nine days before refineries are up and going, so refined gasoline is going to be in a shortage situation because of the power outages and flooding,' she said.

'It is going to be felt for the next week that we have gasoline shortages, so people need to be prepared for that.'

Chevron said it was 'concerned about severe gasoline supply disruptions in the wake of Hurricane Ike.”

Hurricane Ike shut down most of the crude oil production in the Gulf Coast, which accounts for 25 percent of the total U.S. output.

Citgo made a similar request after Gustav hit. They then withdrew it after ships were allowed to pass through a nearby channel.

Despite the Bush administration’s bellicose attitude towards Venezuela and its president, Hugo Chavez, Citgo sponsors low-cost heating oil and free energy-saving light bulb programs for low- and medium-income Americans.