Emergency Oil Releases Risk Draining the World’s Last Supply Cushion
Russia, Germany Add Diesel Supply as Fuel Market Scrambles for Barrels Exporters have adapted through pipelines,… What I Cover Irina Slav has been writing about global energy markets since 2007, covering the oil and gas industry, energy security, commodities, and the… Earlier this week, the International Energy Agency, after consulting with G7, said it would release another 100 million barrels of diesel, gasoline, and crude oil.
Thereleaseis part of a plan announced in March to release 400 million barrels of oil in response to the Hormuz squeeze.
But there is a problem with those releases—storage is emptying.
administration began releasing oil from the Strategic Petroleum Reserve, a flurry of reports followed, citing experts who warned the level of oil in the SPR was already low enough for concern, and any further draws would be risky.
As of the start of October, the amount of oil in the strategic U.S.
reserve stood at 331.2 million barrels, which was the lowest since 1983, following the latest release of over 9 million barrels.
The releases are part of a 172-million-barrel release the United States committed to earlier this year.
The problem is that 331.2 million barrels is quite close to what experts say is the operational minimum for the storage system—between 250 and 300 million barrels.
Letting oil levels fall near the operational minimum is dangerous because this begins to affect the storage infrastructure, and not in a good way.
To avoid that, inventories need to be replenished—and to be able to respond to any future supply crunches, of course.Related: U.S.
Oil Drilling Continues to Inch Upward The U.S.
strategic oil reserve, however, is not the only one reaching minimum levels.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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