US strategic oil reserves plummet to lowest levels since 1984.
Data from the U.S. Department of Energy indicates that the country's emergency crude oil inventories have fallen to 434,1 million barrels.
Sputnik - Last week, U.S. Energy Secretary Jennifer Granholm said the White House is considering releasing even more oil from the U.S. Strategic Petroleum Reserve to try to curb the surge in oil prices expected in time for the Christmas holiday season.
US Strategic Petroleum Reserves (SPRs) hit their lowest level since October 1984, according to US Department of Energy data released on Monday (12).
The data indicated that the country's emergency crude oil stocks fell to 434,1 million barrels last week and that the SPR release included about 6,3 million barrels of sweet crude and about 2 million barrels of sour crude.
This followed U.S. Energy Secretary Jennifer Granholm telling Reuters last week that the Biden administration will evaluate further SPR launches after the current program ends in October.
No formal decision has been made regarding the launch of the SPR, but Bloomberg news agency cited unnamed sources claiming last week that the process could take place in November, December, or January, if given the green light.
SPR has been steadily declining for the past nine months, and the decline accelerated to double digits after the Biden administration announced it would sell up to one million barrels of oil every day through October to try to stabilize domestic gasoline prices.
The SPR was created by then-US President Gerald Ford in 1975, following the oil embargo by the Organization of the Petroleum Exporting Countries (OPEC) after the Yom Kippur War of October 1973. Since then, the US president has been authorized to release oil from the emergency reserve only in the event of a "severe power disruption" that is considered a threat to the US economy or national security.
The latest developments related to SPR come after US Treasury Secretary Janet Yellen warned last Sunday (11) that Americans could see an increase in oil prices this winter (Northern Hemisphere), after the European Union (EU) reduced oil imports from Russia.
"It's a risk that we're working on, the price ceiling, to try and address this winter. The European Union, for the most part, will stop buying Russian oil. Furthermore, they will prohibit the provision of services that allow Russia to ship oil by tanker, and it's possible that this could cause an increase in oil prices," Yellen told CNN.
Earlier this month, the G7 finance ministers (a group comprised of Germany, Canada, the United States, France, Italy, Japan, and the United Kingdom) confirmed their intention to impose price caps on Russian oil as part of the expanded sanctions against Moscow that Western countries have applied to Russia because of its ongoing special military operation in Ukraine.
Russian Deputy Prime Minister Alexander Novak deemed the idea of imposing a price ceiling on Russian oil absurd, warning that Moscow would not deliver oil and refined products to countries that supported the decision. Russian President Vladimir Putin, in turn, described the idea as "stupid," adding that it would lead to price increases and that global demand for Russian energy remains high.
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