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Main » 2019 » September » 18 » SPR - US oil reserves: it pays to know
09:41
SPR - US oil reserves: it pays to know

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Once an important strategic object of Saudi Arabia has suffered from an attack drones Donald Trump announced its readiness to use oil from US storage if need be.

Many do not know that the SPR - are natural salt caves, which are located under the ground, and not as many think tanks. Four of them. They store about 640 million barrels of oil it is in the states of Texas and Louisiana. 

 

 

It is noteworthy that the members of the International Energy Agency, it is necessary to have in reserves volume which is equivalent indicator of oil imports in three months, but as practice shows - US stocks take a leadership position.

The idea of creating SPR appeared in 1970 and immediately repositories have been created in five years, when the law was passed the Energy Policy and energy saving. Preceded by the oil ban, led to a significant rise in prices in the world. It was then that the members of the Organization of Arab Petroleum Exporting Countries, decided not to supply oil to the United States due to the fact that the White House was on the side of Israel's military action against the eastern states.

And while the war lasted only twenty-one days, but the ban scored the extent and spread to the United Kingdom, Canada, Japan and the Netherlands and lasted until March 1974. This has led to a rise in price of oil prices - from $ 3 a barrel to $ 12 per barrel.

As already mentioned above - SPR - it's underground caves, which are created in the deep salt domes. Each of them has a great location, close to major centers of oil refining. Repositories may be deep enough - more than one meter in depth, and the volume of one million barrels of 6 and a maximum - 37 million barrels.

To start them took considerable resources - almost 4 million dollars. But it is up to ten times cheaper than using traditional storage. It is also necessary to note and the security of such vessels, since oil is sealed in them, as well as oil is kept at depth, it protects it from external risks.

Bryan Mound - the largest cave for storage of petroleum, which is located near Freeport. 20 has underground storage tanks, the volume of which is at 254 million barrels, and its flowing ability is 1.5 million barrels per day.

According to the recent reported US Energy Information Administration, September 13 in reserves is 644.8 million barrels of oil. And if you take the average for spending per day of oil - 20.5 million barrels, it will turn out that this stock will last for a month, or more precisely 31 days.

Back in 2017, Donald Trump offered to sell part of the stock in order to fill the coffers of the United States, but not all that easy. Back in 1975 was made a law under which to use the strategic reserve is possible only when the outage happened in energy saving.

That is, since the decision to use strategic reserves to its launch will take place at least fourteen days. In addition, the store is crude oil, which requires additional processing, and again this time.

As the Minister of Energy of the United States Rick Perry, after a case of attacks on Saudi Arabia to immediately report the willingness to open storage tanks quite hasty decision, because it is likely the Saudis alone can solve the problem of interruptions of supplies and it is too early. 

Recall that during the existence of the reserves, they have been used three times. In 1991, due to the operation "Desert Storm" that led to the disruption of supplies in Kuwait and Iraq. In 2005, on the background of the "Katrina" hurricane that caused extensive damage to US oil infrastructure. The third time occurred in 2005 - when the IEA members to provide joint support to the market due to geopolitical issues.

Also took advantage of shale oil and Bill Clinton, namely in 1997, he decided to sell 28 million barrels of oil to replenish the budget. Note that reserves must be below 450 million barrels. Accordingly, the previously filed idea Trump is void, since he offered to sell more than 50% of reserves. Namely, from 2017 to the year 2025 were made on the sale, in 2018 it earned 500 million dollars used.


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Author Andrew Kemp company WELTRADE

 

 

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