New US Budget Green Lights Oil Storage Sale

With the budget approved on Wednesday, The US Congress gave a green light to the sale of 100 million barrels of crude oil out of the country’s 665.1 million barreled emergency storage under the Texas and Louisiana coasts. According to the new budget, the sale, which amounts to 15% of total storage, will be gradually realized from 2022 and onward. With the current prices, the revenue of this sale will be about $ 6.1 billion. In a statement he made last year, President Donald Trump called for the sale of 50% of the storage, evoking opposition from both parties. The disgruntled politicians have been vocal about how such an attempt would would mean for US to loosen its own safety net and have pointed out that the stored crude oil has been purchased when oil prices were higher, urging to postpone the sales until prices are higher to avoid any monetary losses. Built after the 1970s’ oil crises to protect the US consumers in any extraordinary events, the oil storage was used in many occasions, including war, political turmoil, extraordinary weather events since its establishment. It was last used in September after Hurricane Harvey, where 5.3 million barrels were sold to Texas refineries when they were flooded. – Bloomberg & Reuters