Opec ‘not concerned’ by Trump’s proposal to sell US strategic petroleum reserves

Posted: May 26, 2017 by oldbrew in Energy, Politics, shale oil
Tags: ,

Credit: ktuu.com

Holding vast stockpiles does seem outdated when you can produce your own at an increasingly rapid rate, thanks to new discoveries and modern techniques like fracking.

US President Donald Trump’s 2018 budgetary proposals, currently before Congress, have irked many and tucked in the fine print is an outrageous (says the IB Times) plan to sell over 50% or 687m barrels of the country’s government-owned strategic petroleum reserves (SPR), stockpiled in the states of Texas and Louisiana as an emergency measure.

The SPR was created by the US government following the 1973 oil crisis, which saw several Middle Eastern Opec members impose an oil embargo following Washington’s backing of Israel in the Yom Kippur War.

Unconcerned by current geopolitics, the Trump administration says the sale could generate $16bn for US taxpayers over the next 10 years.

At a time when the oil market is grappling with supply and demand imbalances, with Opec and 10 non-Opec countries opting to extend their production cuts, the impact of such a sale could be felt.

However, several Opec delegates, departing Vienna, Austria – from the recently concluded ministers’ meeting – told IBTimes UK they are “unconcerned.”

A Kuwaiti source said the sale was a “matter for the US government, while Opec’s task over the next 9 months would be to address the inventory overhang” and bring it down a 5-year average of 2.7bn barrels, from a current level of around 3bn barrels.

A member of Iraq’s delegation privately expressed scepticism whether the proposal would even pass Congress in its current format. “We believe it is being proposed as part of wider budgetary proposals which would be susceptible to amendments and is not something we are concerned about,” said the delegate.

Continued here.

  1. Tim Hammond says:

    700 million barrels is pretty much nothing – that’s around one month of the US’d consumption.

    No reason for OPEC to be remotely concerned about that.

    $16 billion might do some good though.

  2. oldbrew says:

    Will Trump Send Oil Prices Crashing?

    If he does, the reserves sale will bring in less $$$.
    – – –
    Saudi Finance Minister: “I Wouldn’t Care If The Oil Price Is Zero”
    By Haley Zaremba – May 23, 2017

    Saudi finance minister Mohammed Al Jadaan told CNN, “We are planning to totally [end] that dependency that we have been living for the last 40, 50 years. Hopefully by 2030, I wouldn’t care if the oil price is zero.”


  3. Russ Wood says:

    Meanwhile, South Africa’s new Energy Minister has reported that the country’s ENTIRE oil reserve stockpile was sold on the quiet, not “turned over” as the previous minister reported. This previous minister reckoned that as the oil was still in SA’s tanks, it was still “reserve”. This fell apart when the buyers actually took away the oil the’d bought!

  4. oldbrew says:

    Paris climate commitment ‘crippling’ to US growth: White House
    May 26, 2017

    A solution discussed in Washington could be to remain in the Paris Agreement but launch a re-examination of US objectives.

    Read more at: http://phys.org/news/2017-05-paris-climate-commitment-crippling-growth.html

    F*cked-up priorities: Trump talks terrorism while Europe shouts ‘Climate!’

  5. p.g.sharrow says:

    the threat of the sale from American strategic stockpiles will keep a lid on prices and be worth far more to the American economy then any actual income from the sale…pg