Trump to fill Strategic Oil Reserves, easing price pressures during Saudi-Russia dispute
U.S. will have to buy 77 million barrels on the oil market
President Trump has directed the Energy Department to secure 77 million barrels of American oil to fill the nation's Strategic Petroleum Reserve, amid the ongoing global coronavirus crisis and an oil war between Russia and Saudi Arabia.
The department will begin filling the reserves by soliciting up to 30 million barrels of oil and will eventually acquire the full 77 million barrels.
“DOE is moving quickly to support U.S. oil producers facing potentially catastrophic losses from the impacts of COVID-19 and the intentional disruption to world oil markets by foreign actors,” Energy Secretary Dan Brouillette said Thursday.
Assistant Secretary for Fossil Energy Steven Winberg said the reserve is prepared to take in as many as 685,000 barrels daily. The solicitation for the first 30 million barrels seeks May and June deliveries, but the DOE's press release notes that "early April deliveries are encouraged."
"The small to midsize oil producers, which are the focus of the initial crude oil purchase, employ thousands of Americans,” Under Secretary of Energy Mark W. Menezes said. “These businesses have been particularly hard hit by recent events. But under President Trump’s leadership, we are taking swift action to assist hard hit producers and deliver strong returns to the taxpayer.”
Republican Minority Whip Rep. Steve Scalise issued a statement praising the president's move to cap the country's strategic reserves.
"In the face of market manipulation by Russia and Saudi Arabia and decreased demand caused by a global economic slowdown, President Trump has taken decisive action to both shore up our Strategic Petroleum Reserve and ensure that American oil and gas producers can stay competitive and keep American workers on the job."