U.S. to Release 11 million Barrels of Crude from Strategic Stockpile

Graphic for News Item: U.S. to Release 11 million Barrels of Crude from Strategic Stockpile

The U.S. plans to release 11 MMbo from its 660-MMbbl emergency stockpile, just as American sanctions on Iranian oil exports kick in.

The sour, high-sulfur crude will hit the market in Oct. and Nov., according to a notice of sale from the Energy Department.

That timing may reflect the White House’s concern over a tight oil market amid the renewal of U.S. sanctions on Iran, according to analysts at ClearView Energy Partners. The Trump administration has asked allies to halt all imports of Iranian oil by Nov. 4, stoking global supply fears. Analysts have also speculated about whether President Trump will announce an emergency release from the crude stockpile to lower U.S. pump prices in the run-up to November’s mid-term elections.

Yet an 11-MMbbl sale over two months likely won’t do much to offset the impact of sanctions, which the administration estimates will remove 700,000 to 1 MMbpd of Iranian crude from the global market by early November.

The October sale is part of a regular draw-down schedule to raise money for government programs. The Energy Department will draw crude from three sites that are part of the Strategic Petroleum Reserve: Bryan Mound and Big Hill in Texas, and West Hackberry in Louisiana.

Any further action by the president, who can release up to 30 MMbbl in an emergency, is unlikely before the Nov. 4 deadline, ClearView said.

Trump has proposed the sale of half of the stockpile — which currently totals 660 MMbbl — to cut the budget deficit. Congress has so far authorized the sale of around 240 MMbbl between 2017 and 2027.

Bids must be submitted no later than 2 p.m. Central Time on Aug. 28, with contracts awarded within seven business days. Deliveries will take place in October and November, according to the notice.

Source: www.worldoil.com

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