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A huge volume of oil is stored in caves under Louisiana and Texas
Following attacks on Saudi Arabia's main oil infrastructure, US authorities are considering relying on a huge stockpile of oil stored in the United States.
As oil prices rose, President Donald Trump tweeted that they could use oil "to keep the markets well stocked."
The oil of which he spoke rose to more than 640 million barrels, stored in salt caves under the states of Texas and Louisiana. The idea of holding these "strategic reserves" dates back to the 1970s.
All members of the International Energy Agency must hold the equivalent of 90 days of oil imports, but the US stock is the largest emergency store in the world .
Why was it set up?
American politicians first had the idea of an oil stock in the early 1970s, after an oil embargo imposed by the Middle East countries had resulted in soaring prices around the world.
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Members of the Organization of Arab Petroleum Exporting Countries – including Iran, Iraq, Kuwait, Qatar and Saudi Arabia – have refused to export the oil in the United States because he supported Israel in the 1973 Arab-Israeli war.
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The embargo arose as a result of the 1973 Arab-Israeli war, also known as the Yom Kippur War.
The war lasted only three weeks in October of this year. But the embargo – which was also aimed at other countries – lasted until March 1974, resulting in a quadruple rise in world prices, rising from about $ 3 to nearly $ 12 a year. barrel.
The images of cars lining up at the fuel pumps in the affected countries have become one of the defining images of the crisis.
The US Congress enacted the Energy Policy and Energy Conservation Act in 1975. It created the Strategic Petroleum Reserve in the event of a major supply problem.
What is the reserve?
At present, oil is stored at four sites: near Freeport and Winnie, Texas, and outside Lake Charles and Baton Rouge, Louisiana.
Each site has several artificial salt caverns up to one kilometer underground where the oil is stored. It's a lot cheaper than keeping it in above-ground tanks, and safer: the chemical composition of the salt and the geological pressure prevent any oil leakage.
The largest site in Bryan Mound, near Freeport, has a storage capacity equivalent to 254 million barrels of oil.
The website of the reserve indicates that on September 13, 644.8 million barrels of oil were held in these caves.
According to the US Energy Information Administration, Americans have used 20.5 million barrels of oil per day on average in 2018, which means that there is enough oil to run the country for about 31 days.
How it works?
Under Gerald Ford's 1975 law, the president can only authorize the release of oil reserves in the event of "serious interruption of energy supply".
Physical constraints mean that only a small amount of oil can be extracted from the caves each day. Even if the presidential authority allowed the release of oil, it would take nearly two weeks to reach the markets.
In addition, the oil is not refined. Before it can be used for cars, ships and planes, it should be turned into fuel.
US Secretary of Energy Rick Perry told CNBC television on Monday that it was "a bit premature" to talk about breaking into the reserve following the attacks in Saudi Arabia.
Has it been used often?
It was last used in 2011, when disruption caused by the Arab Spring uprisings prompted IEA member states to release a total of 60 million barrels of oil to reduce disruptions in supplies. in energy.
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The United States has millions of barrels of oil stored in underground salt caverns near the Gulf of Mexico
However, the United States has sold a large number of barrels on a few occasions. President George W. Bush authorized its use during the Gulf War in 1991, while his son, George W. Bush, authorized the sale of 11 million barrels in the aftermath of Hurricane Katrina.
But the value of keeping such a large reserve at a time when US energy production is booming has been questioned. Some in Washington have even recommended to get rid of it completely.
A report from the Government Accountability Office suggested it in 2014, saying it could lower prices at the pump for US consumers. In 2017, the Trump administration considered selling half of the stocks to help reduce the federal deficit.
Under Bill Clinton's presidency, 28 million barrels were sold in 1997 as part of deficit reduction.
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