US to top up strategic oil reserve with 77 million barrels

US to top up strategic oil reserve with 77 million barrels
  • Clock-gray 13:45
  • calendar-gray 29 March 2020

The statement comes after the US Department of Energy (DOE) said last week that it plans to buy 77 million barrels of oil on the domestic market to shore up the country's strategic reserve, including an initial purchase of 30 million barrels in the immediate future, APA reports citing Sputnik. 

"DOE is moving quickly to support US oil producers facing potentially catastrophic losses from the impacts of COVID-19 and the intentional disruption to world oil markets by foreign actors", Energy Secretary Dan Brouillette was quoted as saying in a press statement on the department's website.

The move followed President Donald Trump ordering the US's strategic oil reserve to be filled "up to the top", cancelling earlier plans to sell off part of the rainy-day supply. This came as Washington announced an $800 billion+ package of measures to tackle the economic impact of the coronavirus outbreak, with the steps including a payroll tax holiday, filling up the Strategic Petroleum (SPR), and other initiatives.

Oil prices nosedived drastically following an OPEC+ meeting in Vienna on 6 March, when the group failed to reach agreement amid a Saudi push to raise production cuts by 1.5 million barrels per day (bpd) through the end of 2020, on top of the 2.1 million bpd in cuts already agreed upon.

Russia did not agree to the additional cuts, prompting Riyadh to unleash a price war, offering discounts for April futures and announcing an increase in production of several million bpd.

 

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