Baku, Azerbaijan, May 26
By Leman Zeynalova – Trend:
The possible sale of the US Strategic Petroleum Reserve is likely to have a little effect on the OPEC activities to balance the oil market, Guy Caruso, Senior Adviser, Energy and National Security Program at the Center for Strategic and International Studies (US), told Trend May 26.
“The proposed partial sale of the US Strategic Petroleum Reserve (267 million barrels) is included in the Trump administration proposed budget for 2018 fiscal year (October 2017 through September 2018) and requires approval by Congress,” said the expert. “If approved, the proposal would be carried out over a 10-year period. The Department of Energy would be authorized to sell the oil by auction to the high bidders.”
Because the sales would be spread out over a long time period (10 years) and at a relatively small amount of 26 million barrels per year, the sale would likely have little effect on the OPEC deal, added Gruso.
The Strategic Petroleum Reserve is a US government complex of four sites with deep underground storage caverns created in salt domes along the Texas and Louisiana Gulf Coasts that store emergency supplies of crude oil owned by the US government.
Current storage design capacity is 713.5 million barrels.
The US started the petroleum reserve in 1975 after oil supplies were interrupted during the 1973–1974 oil embargo, to mitigate future temporary supply disruptions.
OPEC held its 172nd meeting on May 25, followed by the 2nd OPEC and non-OPEC ministerial meeting in Vienna, Austria.
OPEC member countries and non-OPEC parties, Azerbaijan, Kingdom of Bahrain, Brunei Darussalam, Kazakhstan, Malaysia, Mexico, Sultanate of Oman, the Russian Federation, Republic of Sudan, and the Republic of South Sudan have agreed to extend the production adjustments for a further period of nine months, with effect from July 1, 2017.
The reductions will be on the same terms as those agreed in November.
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