This is what the US administration has directed, after Biden ordered the use of 50 million barrels of his country’s strategic oil reserves in a coordinated effort with other countries to mitigate the rise in fuel prices.
Biden said that “there is a coordinated global movement on oil reserves that will help deal with the lack of supply,” explaining that “it will not solve the problem overnight, but it will make a difference” after rising gas prices have become one of the problems facing the entire world.
Simultaneously, some of the world’s largest energy consumers have announced that they are joining the US-led effort to release strategic oil reserves, including India, Japan, China, South Korea and England.
4 secured sites
The United States secures strategic petroleum reserves in underground storages across four highly guarded, low-profile locations along the Gulf of Texas and Louisiana coasts.
The US authorities have been storing crude oil in 61 huge rocky caves dug under the surface of the earth, at the sites of “Bryan Mound”, “Big Hill”, “West Hackberry” and “Beau Choctaw”.
According to official data from the Office of the Fossil Energy and Carbon Administration of the US Department of Energy, and reviewed by “Sky News Arabia”, the size of the strategic reserves of oil stored in the ground amounts to 604.5 million barrels, according to the periodic bulletin issued on November 19. This stock is sufficient to meet US demand for a period of more than a month.
December 2009 was the highest ever in the US Strategic Petroleum Reserve with 726.6 million barrels.
Arab ban
In an interview with “Sky News Arabia”, the professor of petroleum and energy engineering, Ramadan Abul-Ela, attributed the beginning of thinking about the establishment of the strategic oil reserve to the post-October 1973 war, after the embargo decided by Arab countries in the midst of the war caused a rise in gasoline prices, which led to harm the US economy.
Abul-Ela said: “The price of a barrel increased from $3 to $12, and it was a precedent that had not happened before.”
Subsequently, former US Secretary of State Henry Kissinger proposed the establishment of the International Energy Agency, with which industrialized countries joined to follow unified policies for countries to deal with energy-producing countries, and meet their needs after the oil crisis, according to the energy professor.
American presidents used the strategic reserve as an important card during emergencies, after storage began since 1975, as quantities had already been put forward on several times, including before Hurricane Katrina in 2005, as the total emergency issuances from crude oil sales and exchanges amounted to 20.8 million barrels.
The reserves were also withdrawn in 2011 during the conflict that erupted in Libya, which led to a decrease in the stockpile to 695.9 million barrels, when it reached 726.6 million barrels.
The US Department of Energy indicated the possibility of pumping about 4.4 million barrels per day of strategic reserves to major centers, while it takes only 13 days for oil to reach the US market from the issuance of a presidential decision.
The International Energy Agency contributes to coordinating the withdrawal of reserves in member states and provides data on stock levels. There are 3 ways to maintain strategic reserves that meet the ninety-day standard, according to the agency’s website. They are represented in the commercial reserves of the refiners and the reserves of governments and government agencies. Each country has the right to choose the distribution of the required quantity over the three types of reserves.
Returning to the recent release of 50 million barrels of strategic oil reserves, the Biden administration will use its stock in two ways; The first was to offer 32 million barrels through an exchange system, provided that this oil would be returned to the federal government to be poured into the strategic stockpile over the coming years, and the second was to sell 18 million barrels over several months.
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