Reserves were already at their lowest, but to allow a supply undermined by the Ukrainian conflict, the United States will still draw a little more “until production ramps up later this year”. Joe Biden announced, Thursday, March 31, the largest drain of oil from American strategic reserves, up to 180 million barrels.
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A decision which immediately led to a fall in prices, synonymous with the appeasement of markets put under pressure by the international situation, but which amputates a reserve constituted in the event of a crisis. There are also strategic gas reserves. In France, 14 sites operated by Engie store gas underground to deal with possible shortages. The storage capacity is 14 billion cubic meters, filled to 90%, or about a quarter of annual consumption.
► What are these strategic reserves used for?
In the aftermath of the first oil shock caused by a drop in production decided by the OPEC countries, the International Energy Agency asks States to build up oil stocks up to 90 days of net imports. These strategic reserves are thus used to deal with a sudden crisis which would see the supply of oil interrupted.
They are sometimes used to bring down the price of hydrocarbons, when prices increase sharply and no longer only in times of shortages. In Europe, this 90-day rule is repeated in a 2009 directive, imposing it de facto on all Member States.
Other countries, such as China or India, which are not members of the agency have also constituted strategic reserves. The interest of such storage is less for Russia, which imports little oil because it is a major world producer. Its reserves thus amount to only about 15 million barrels.
► Who makes the decision to tap into these reserves?
Most of the time, governments decide to use their reserves. Several American presidents have thus used their oil reserves: George Bush during the Gulf War in 1991, his son in 2005 after Hurricane Katrina hit Louisiana. Joe Biden himself, deeming inflation too high, had already made the decision to draw 50 million barrels from his stocks to bring prices down in November 2021.
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For its part, the International Energy Agency can encourage Member States to use its reserves. In some cases, it can also play a more important role and be called upon to coordinate the use of everyone’s reserves. This is particularly what happened in 2011, when the war in Libya dried up the oil supply.
► What is the state of oil stocks in the world?
Unsurprisingly, the United States has the largest hydrocarbon storage capacity in the world. These are 716 million barrels – only China can store that many, with a maximum capacity of almost 690 million barrels. However, US strategic reserves have been steadily declining in recent years. At 687 million barrels in 2017, they are now at their lowest level ever, at 568 million. The recent decision of the American president will further reduce them by one million barrels per day for six months.
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By comparison, France has about 65 million barrels of oil in its strategic reserves. Recently, France drew on it to deal with the blockages of refineries in 2016, a consequence of demonstrations against the labor law. Germany has about 70 million.