Washington, May 17: The amount of crude oil stored for emergency use in the United States has hit a 35-year bottom as holdings in the Strategic Petroleum Reserve (SPR) have plummeted from withdrawals made by the Biden administration to plug supply deficits, data from the US Energy Department showed.
Crude holdings in the SPR dropped by 5 million barrels during the week to May 13, reaching 538 million barrels, according to latest data on stockpiles in the reserve issued by the Energy Department.
Historical SPR data showed that to be the lowest level since 1987 for emergency crude stockpiles in the United States.
Of the 5 million barrels withdrawn during the week to May 13, some 3.9 million constituted barrels of sour crude while the balance 1.1 million barrels were made up of sweet crude.
Sour crude represents middle-of-the-barrel variety oil that has higher sulfur content and is more viscous than sweet crude. Sour crude is typically required for making the diesel needed for trucks, buses and trains, as well as the fuel for jets. Sweet crude, on the other hand, has very little sulfur and resides at the upper-end of the barrel. It is almost exclusively used for making gasoline, which is also known as petrol outside of the United States.
A dire shortage of crude oil exports due to the collective West’s sanctions against Russia have led to record high prices of both diesel and gasoline in the United States.
The closure of several refineries during the height of the coronavirus pandemic have reduced US oil refining capacity as well, compounding the problem.
To alleviate the tight supply situation, the Biden administration has been releasing oil from the SPR in stages since November.
Between the end of February and April, the administration took an average of 3 million barrels out of the SPR every week to help meet domestic refiners’ demand for crude.
The Biden administration’s biggest SPR releases commence this month onward when it will issue a total of 180 million barrels from the reserve – or one million barrels per day over a period of 180 days.
(UNI)
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