U.S. President Donald Trump announced on Friday that the government will buy large quantities of oil to top up the nation’s Strategic Petroleum Reserve (SPR).
The announcement is part of Trump’s planning for the national emergency he has declared in response to the coronavirus (COVID-19). The action gives states, territories and tribes access over $42 billion in existing funding.
The SPR currently has around 635 million barrels of crude oil out of a total capacity of 713 million barrels.
Department of Energy spokeswoman, Shaylyn Hynes, said on Friday: “This afternoon, President Trump declared a National Emergency concerning COVID-19, and directed Secretary Brouillette to purchase oil for storage in the Strategic Petroleum Reserve to provide relief to the American energy industry. This evening, the Secretary issued a memo to Assistant Secretary for Fossil Energy Steven Winberg to immediately initiate an expedited process for this purchase of crude oil owned and produced in the United States. The Department is currently working to develop a solicitation for the purchase of oil, which we will issue as soon as possible. Secretary Brouillette applauds the President’s continued bold and decisive action to combat the worldwide impacts of COVID-19.”
Earlier last week, in light of the recent fluctuations in global oil markets as a result of OPEC+ disagreements, the Department of Energy suspended the recently announced sale of crude oil from the SPR. The sale was designed to raise revenue for SPR facility maintenance and upgrades. “Given current oil markets, this is not the optimal time for the sale,” said a spokesperson.
“The United States, as the world’s largest producer of oil and gas, can and will withstand this volatility,” said Hynes last week. “The growth of the unconventional oil and gas industry in the United States has led to a more secure, resilient and flexible market.”