U.S. Strategic Reserve Oil Makes Historic First Delivery to California

For the first time, crude oil from the U.S. Strategic Petroleum Reserve (SPR) has been delivered to California, highlighting a reshaping of trade flows and shipping routes following the disruption of Middle Eastern crude supplies due to the Iran war.

This unprecedented cargo movement was disclosed by the vessel-tracking firm Kpler. The operation was led by Chevron, with the crude loaded in Louisiana and arriving at several California refineries after transiting through Panama.

California was once a top oil-producing state in the U.S., but its reliance on imported crude has increased in recent years. Last year, it imported approximately 230,000 barrels per day from the Middle East. Supply of alternative crudes is also limited due to competitive demand from Asia.

**Complex Transit Route: From Louisiana via Panama to California** According to Kpler, citing bill of lading data, the crude transported was of the Louisiana Bayou Choctaw Sweet grade. About 460,000 barrels were destined for Chevron's Richmond refinery, with another 50,000 barrels unloaded at the Chevron El Segundo refinery.

The transport route was circuitous. Kpler reported that the tanker Red Moon loaded nearly 980,000 barrels of Bayou Choctaw Sweet crude in Louisiana and discharged it at a terminal on the Atlantic side of Panama in early May, with Chevron listed as the seller of the cargo.

Subsequently, the crude was transported via a 131-kilometer pipeline across the Isthmus of Panama from the Atlantic to a Pacific-side terminal.

The Very Large Crude Carrier (VLCC) Pascagoula Voyager, chartered by Chevron, then loaded approximately 2 million barrels of crude at the Pacific terminal, which included a blend of Guyana's Unity Gold grade crude, before setting sail for the U.S. West Coast.

Kpler noted that upon arrival, the VLCC transferred the crude onto two smaller vessels, which then delivered the cargo to the respective California refineries.

Chevron had previously stated that it utilized a Jones Act waiver in May to move crude from the U.S. Gulf Coast to the West Coast.