Washington (Platts)--28Jul2008

The US has halted crude oil deliveries to the Strategic Petroleum Reserve
for this year as the last tanker carrying royalty-in-kind oil arrived Monday,
ending the Bush administration's effort to top off the nation's emergency
supply.

The tanker, carrying about 1.2 million barrels of crude oil as part of
the royalty-in-kind program, will be offloaded by July 31, Department of
Energy spokeswoman Angela Hill said in an interview.

Since the Bush administration began filling the reserve shortly after the
terrorist attacks of September 11, 2001, it has been accepting oil in lieu of
lease royalty payments at the rate of about 76,000 b/d.

With the cargo that arrived Monday, the SPR will be about 97% full,
holding 707 million barrels of crude oil, including 283.1 million barrels of
light sweet crude and 423.7 million barrels of heavy sour crude. Light sweet
crude is considered more valuable since it is lower in sulfur content and is
easier to refine into gasoline, diesel and other distillates.

The SPR became a political football this summer as gasoline prices soared
over $4/gal and crude oil prices set new records. In May, the House and Senate
voted overwhelmingly to force the Bush administration from adding oil to the
reserve. After the vote, the Bush administration agreed to "defer" any further
shipments of oil for the remainder of the year.

Last week, a Democrat-backed measure in the House to release about 10% of
the SPR's supply in a bid to lower gasoline prices, failed after lawmakers did
not get a two-thirds majority needed to pass the bill off the floor.

--Daniel Goldstein, daniel_goldstein@platts.com