In a surprise move, the Obama Administration today announced that it would open U.S. strategic oil reserves, and release 30 million barrels of oil in coming months, in a concerted effort with other nations to try to depress the price of crude oil.
The announcement - which comes as gasoline prices have been falling - was made this morning by the Energy Department. Here is the news release that was sent to reporters:
Department of Energy to Release Oil from the Strategic Petroleum Reserve
Washington, DC – U.S. Energy Secretary Steven Chu announced today that the U.S. and its partners in the International Energy Agency have decided to release a total of 60 million barrels of oil onto the world market over the next 30 days to offset the disruption in the oil supply caused by unrest in the Middle East. As part of this effort, the U.S. will release 30 million barrels of oil from the Strategic Petroleum Reserve (SPR). The SPR is currently at a historically high level with 727 million barrels.
“We are taking this action in response to the ongoing loss of crude oil due to supply disruptions in Libya and other countries and their impact on the global economic recovery,” said Energy Secretary Steven Chu. “As we move forward, we will continue to monitor the situation and stand ready to take additional steps if necessary.”
The United States has been in close contact with oil producing and consuming countries about disruptions to the international oil market that could affect the global economy. The situation in Libya has caused a loss of roughly 1.5 million barrels of oil per day – particularly of light, sweet crude – from global markets. As the United States enters the months of July and August, when demand is typically highest, prices remain significantly higher than they were prior to the start of the unrest in Libya.
The Administration will continue to consult closely with other consuming and producing countries in the period ahead. The decision today is intended to complement the production increases recently announced by a number of major oil producing countries. The United States welcomes those commitments and encourages other countries to follow suit.
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