Washington has already sold about 115 million barrels of its reserves, sales hitting a record nearly a million barrels a day since mid-last May, Bloomberg notes.
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The US is selling the oil from its strategic reserve.
Experts warn that the North American country’s oil reserves could be running out ahead of schedule as the United States sold crude oil from its strategic petroleum reserve last year to stave off further rising prices in the energy market, Bloomberg reported on Friday.
In this regard, the International Energy Agency warned earlier this week that “andGlobal oil supply may struggle to keep up with demand next year.”
Bloomberg notes that Washington has sold about 115 million barrels of its strategic reserve, sales that have reached a record nearly a million barrels a day since mid-May this year. The White House is currently bringing more crude oil from its reserves onto the market than most medium-sized countries in the Organization of the Petroleum Exporting Countries (OPEC) such as Algeria or Angola produce.
What kind of crude oil does the US have and at what rate is it spending it?
Should the US decide to keep the current selling rate, its oil reserves would be reduced to 40-year lows of 358 million barrels by the end of October, the month in which it could stop supplying the market . For comparison: just a year ago, the strategic reserve was 621 million barrels.
But, What would happen if Washington decides to shut down its supplies to the energy market in October? Experts point out that the loss of these additional quantities of oil would mean a rapid depletion of commercial inventories and put pressure on crude oil prices, which would lead to a rise in these prices.
On the other hand, even if Washington could continue selling into next year, it would face another important problem: the quality of the crude oil that would be held in reserve for its own consumption. The strategic reserve contains two types of oil: the moderately acidic (which is the same quality as the crude oil produced by Russia, most Middle Eastern countries and Venezuela, and most commonly used by the US) and the slightly sweet. “The first adjective refers to the density of the oil, the second to the sulfur content,” says the report.
An analysis based on U.S. government data shows that 85% of strategic reserve oil sold last year was at intermediate acidity, which has led to a “dramatic” drop in the amount of crude oil in the reserve, and that’s expected to be in the next few years four months to be further reduced.
According to OilX estimates, cited by Bloomberg, only 179 million barrels of intermediate acid crude would remain in US reserves by the end of October, which is favored by the North American country. That means Washington is expected to have sold between 180 and 190 million barrels of this type of oil from its reserves between June 2021 and October 2022.