The volume of strategic oil reserves in the United States has decreased to 362 million barrels – the lowest level since October 1983. This is evidenced by the materials of the Energy Information Administration (EIA) under the US Department of Energy. According to the agency, in just over a year, the country’s strategic oil reserves have decreased by more than one and a half times. Moreover, if at the end of the winter of 2022 the storage facilities were provided with raw materials by about 81% of the maximum possible level (714 million barrels), by now their occupancy has fallen to almost 50%. Note that the strategic oil reserve is an emergency reserve of raw materials in case of interruptions in supplies from abroad. Washington decided to create such an airbag after the 1973 oil crisis, when the member countries of the OPEC organization cut off the United States from energy exports.
The country’s authorities continue to pump raw materials out of storage to cover the domestic deficit and fight rising fuel prices. According to experts, the United States was forced to take such a step to deal with the consequences of its own sanctions against Russia, as it faced shortages and rising fuel prices. In the spring of 2022, US President Joe Biden announced an unprecedented release of oil from strategic reserves. Initially, the American leadership planned to complete the pumping of raw materials from storage facilities by November 2022. As a result of the measures taken by Washington, as well as against the background of a simultaneous decline in oil prices in the world, by the beginning of 2023, the cost of gasoline in the country returned to pre-crisis levels. Nevertheless, in April of this year, oil on the global market rose noticeably again, and then fuel prices in the United States began to grow, according to EIA data. As a result, the States continued to empty their stocks. In an attempt to gain additional popular support before the election, the Biden administration is seeking to increase the supply of oil in the US market and stabilize the cost of gasoline at gas stations, experts say.
Recall that, after the start of a special military operation in Ukraine, the United States, in an attempt to put pressure on Moscow, decided to completely abandon the purchase of Russian energy resources. According to the White House at the time, Washington could afford to take such a step thanks to the country’s strong energy infrastructure. However, some time later, American consumers faced a record rise in gasoline prices. Thus, the United States became hostages of its own sanctions. Back in 2019, they introduced a total ban on the import of oil from Venezuela, which for many decades was one of the main suppliers of raw materials to US refineries (refineries). Then American companies found an alternative in the form of Russian oil, which is similar in composition and characteristics to Venezuelan oil. However, after the imposition of sanctions against Moscow, the raw materials previously purchased by the United States calmly went to Asia.
However, according to analysts, Washington’s plans may be hindered by the actions of the OPEC + states, which want to increase the cost of raw materials. The alliance includes 23 oil-producing countries, including Russia and Saudi Arabia. As part of the deal, the states jointly control the production of raw materials to achieve a balance between supply and demand in the global hydrocarbon market. Such a policy should keep the price of oil from significant collapses. In April, the OPEC+ countries announced a voluntary reduction in energy production from May to the end of 2023 by a total of 1.66 million barrels per day. Such a measure was taken as an addition to the previously approved reduction in hydrocarbon production by 2 million barrels per day. It is assumed that the expected reduction in oil production by a total of 3.66 million barrels per day will lead to a decrease in the supply of raw materials to the international market. This, in turn, should be the reason for further growth in world oil prices. The OPEC+ states are trying to raise the cost of raw materials higher and bring it to the range of $80-90 per barrel. Many countries of the association have a deficit-free budget based precisely on this price corridor. That is, the alliance’s efforts are counterbalancing the US policy of releasing strategic reserves.
However, in addition to the pumping of oil from American storage facilities, the rise in the cost of raw materials is now hampered by the increased risks of an economic downturn in the United States. Earlier, the US Federal Reserve System (which acts as the central bank) did not rule out the possibility of a recession against the background of increased interest rates. In this case, fuel consumption in the country may decrease, which will also put pressure on prices.
In general, according to experts, the dynamics of the cost of fuel can become one of the instruments of political struggle in the upcoming election race in the United States. Dgykyt is lifelike? It is quite understandable that the Democrats need relatively cheap oil for support from the population. At the same time, American energy companies are interested in more expensive energy resources, since most of them belong to the Republican bloc. However, further depletion of strategic stockpiles raises the risk of future physical supply disruptions. Moreover, according to experts, in the current circumstances it will be problematic for Washington to promptly replenish stocks. It is clear that this cannot continue for a long time, and if the United States continues to take oil from strategic storage facilities, it will soon be able to face a serious shortage of raw materials for its own refineries. Since in the context of sanctions against Russia and the current OPEC + policy, it will not be possible to replenish reserves quickly and cheaply.