The Strategic Petroleum Reserve (SPR) is part of the power debate after the first Arab oil embargo.
A.D. In the 1973 Arab-Israeli war, members of the Organization of the Petroleum Exporting Countries (OPEC) imposed sanctions on the United States in retaliation for US decision to withdraw its troops from Israel. Shortages of crude oil and petroleum products have led to rapid inflation and long queues at petrol pumps.
The embargo underscores the country’s dependence on oil imports from friendly Arab countries. Political leaders in Washington have decided to implement policies designed to save oil production, such as the 55-hour-speed limit and fuel economy standards.
The federal government has also passed a law creating SPR.
One of SPR’s main missions is to maintain sufficient oil reserves to meet US obligations under the International Energy Program. US Net Import Protection Protection. The US Department of Energy calculates this value by dividing the SPR inventory by the sum of its imports of refined crude oil and petroleum products (IAA).
A.D. In 2012, US crude oil production increased from 6 million barrels a day to 11 million barrels a day. Demand for imported oil has decreased due to rising domestic production.
The United States became a net exporter in October 2019, which means that the United States exports more oil and gas than it imports.
SPR is designed to hold up to 714 million barrels of crude oil at four locations in the Gulf of Mexico, where most of the United States’ refining capacity is. It currently holds about 600 million barrels, but a number of planned budgets could fall to 318 million barrels, according to the IAA.
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Crude oil can be released from the SPR in four cases: emergency cuts, test sales, exchange deals and emergency sales, the EIA said. Emergency reductions and inspection sales are relatively small. The most recent disaster reduction occurred in Libya in 2011, and the latest test sale took place in 2014.
“SPR has issued crude oil swap agreements 13 times since 1996, most recently after the Ida hurricane earlier this year. In these exchange deals, crude oil will be released to private companies and paid in additional barrels on the same date, which is the same as the interest on the loan. ”
President Biden recently announced plans to supply 50 million barrels of crude oil to the market.
Alex Mills is a former president of the Texas Energy Manufacturers Association.