The US strategic oil reserve is depleting much more rapidly than it might seem, writes analyst Javier Blas.
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The US has begun selling fuel from its stockpiles in an attempt to keep world prices down and, as Blas puts it, have become “the barrel’s last hope.” However, such a strategy cannot last long: the country is facing a situation where limited resources are struggling with cut supplies.
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Last year alone, the White House sold almost 115 million barrels of storage, with sales rising to a record high of almost a million barrels a day since mid-May. The volume of stocks sold exceeds that produced by most of the “average” OPEC countries, such as Algeria or Angola.
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If the pace does not slow down, by October, when the US planned to stop trading, the amount of oil in the reserve will reach its lowest level in the last 40 years – 358 million barrels. For comparison: a year ago, the reserves amounted to 621 million barrels, the author of the material notes. However, the stoppage of sales will entail an increase in prices.
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At the same time, not all oil from US reserves is fully suitable for producers. They prefer the high-sulfur crude type produced by Russia, the Middle East and Venezuela, which accounted for 85 percent of sales. Therefore, if you look only at these transactions, the reserves are depleted even faster than it seems. The US will still have barrels of sweet oil, but they are not popular with customers.
