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Strategic Reserve Oil (SPR), which the US government has announced to release, is one of the tools that the US president uses in every economic crisis caused by rising oil prices.



The White House ordered on the 31st of last month (local time) to release 1 million barrels of strategic oil per day to the market for the next six months.



The move came as oil supply insecurity intensified in the aftermath of Russia's invasion of Ukraine and subsequent sanctions.



If rising oil prices lead to severe inflation, it could put a huge political burden on the ruling party.



High oil prices with such explosive power were a phenomenon that continued even before the outbreak of the Ukrainian War.



President Biden announced the release of strategic oil three times in the past four months, including November 23 last year and today (1st) last month.




In fact, the Strategic Oil Reserve is one of the few tools the President of the United States, the head of the administration, can independently wield to control inflation.



According to the Associated Press, the strategic oil reserves are not stored in separate storage but are stored in salt caves (maximum capacity of 700 million barrels) in southern Texas and Louisiana.



It is said that the chemical composition of salt prevents oil leakage, making it safer and less costly than above-ground storage tanks.



According to the U.S. Department of Energy, current stockpiles are 568 million barrels, slightly down from 650 million barrels in the middle of last year.



As of 2019, compiled by the U.S. Energy Information Administration (EIA), the U.S.’s strategic oil reserves can be used for 28 days in the U.S. (254 million barrels a day) and 218 days in Korea (2.6 million barrels a day). is the amount.



Strategic oil reserves are taken out by pouring water into the salt cave.



When crude oil with a lower specific gravity than water floats, it is collected and sent to refineries through oil pipelines.



Strategic oil reserves were introduced in the 1970s when the Middle East oil-producing countries saw the need to separately store emergency use during the oil crisis that weaponized oil supply.



Although the United States is a net exporter of oil, which exports more than imports, it has maintained stockpiles for several reasons.



There are precedents for the release of oil stockpiles in various situations, such as geopolitical events such as war, natural disasters such as hurricanes, ship operation disruptions such as canal blockades, and the need to alleviate budget deficits.



President George WH Bush took 34 million barrels out of the 1991 Gulf War and used 17 million barrels.



President Barack Obama also ordered a release of 30 million barrels to prevent the aftermath of the collapse of Libya's oil supply chain in 2011.



It remains to be seen how much President Biden's strategic oil reserve card will help stabilize prices.



Crude oil demand and supply, which determine oil prices, are affected by complex and diverse variables, such as war, collusion with oil-producing countries, natural disasters, the spread of COVID-19, and the manufacturing economy.



However, it is true that 1 million barrels of crude oil per day is not a small additional supply by looking at the world's overall oil consumption.



This is the largest release ever.



The world consumes about 97 million barrels of oil per day, with the United States accounting for 20 million of that.



Shortly after President Biden's decision to release oil from the stockpile was announced, the price of West Texas Intermediate (WTI) for delivery in May plunged 7%.



But last November, when President Biden announced the release of strategic oil reserves for the first time in 10 years, oil prices fell for about two weeks, but then rose again.



Oil prices have soared 40% this year, and geopolitical factors such as the Ukraine war are making them more volatile.



(Photo = Getty Images Korea)

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