Washington: President Trump announced the crucial decision approving the release of the strategic oil reserve. He said, ‘Based on the attack on Saudi Arabia, which may have an impact on oil prices, I have authorised the release of oil from the Strategic Petroleum Reserve, if needed, in a to-be-determined amount sufficient to keep the markets well supplied.’
After the attacks on the oil installations on Saturday, Saudi Crown Prince Mohammed bin Salman had a telephonic conversation with the US President. During the talks, the Saudi Crown Prince demanded arms and other aid from the US President. Also, President Trump agreed to provide all the necessary assistance to the kingdom. On the sidelines of the developments, President Trump’s urgent decision to open the strategic oil reserves becomes significant.
The US had created the Strategic Oil Reserve after the Arab countries refused to supply crude oil to the United States in 1975. Currently, the United States holds 644.8 million barrels of oil stash. Four locations along the Texas and Louisiana coastline, maintain the reserves. The facilities can store more than 720 million barrels of Strategic Oil Reserve.
The Strategic Oil Reserve has been used only thrice in US history. The most recent was after significant upheavals in the oil market in the Libyan civil war in June 2011, when 30 million barrels of oil was withdrawn from the Strategic Oil Reserves. Before that, the reserve was used during the Katrina hurricane in 2005.
In 1991, the then US President, George W Bush had approved the release of the Strategic Oil Reserves, for the very first time during Operation Desert Storm that had commenced in the Middle East. The attacks on the Saudi oil facilities on Saturday disrupted 5% of the global oil supply. Therefore, Trump’s urgent decision to open up the Strategic Oil Reserves assumes much significance.
Along with the authorisation for the Strategic Oil Reserves, President Trump has also issued orders to expedite approval for the oil pipeline projects in Texas and other states.