The United States (US) Department of Energy launched the first auction as part of the gradual release of strategic oil reserves to mitigate the economic consequences of the war in the Middle East.
The auction, aimed at oil companies, “will cover 86 million barrels” of a total of 172 million to be released progressively, informed the department.
According to the terms of the agreement, oil companies will have to return to the department “the borrowed oil, plus additional barrels”, said the statement released on Friday.
The Department of Energy’s goal is to “strengthen strategic petroleum reserves by stabilizing markets.”
On Thursday, US Energy Secretary Chris Wright said delivery of the total 172 million barrels “will take about 120 days.”
US President Donald Trump has frequently criticized the government of his predecessor, Democrat Joe Biden, for using the reserve to try to reduce gasoline prices.
On Wednesday, the Republican guaranteed that the economic consequences of the conflict in Iran, with the strong fluctuation in oil prices, will not last long and assured that the markets were less affected than he had predicted.
“I thought it would affect us a little bit, but it probably affected us less than I thought. And we’ll be back to normal very soon. Prices are dropping considerably,” Trump emphasized.
In statements released by Fox News, the US President added that “the price of oil will fall, it’s just a question of war”.
Trump emphasized that the price of crude oil “will fall more than anyone imagines,” further stating that markets are “holding up well.”
The 32 member countries of the International Energy Agency decided on Wednesday unanimously to release 400 million barrels of oil from their emergency reserves to address disruptions in oil markets resulting from the war in the Middle East and the closure of the Strait of Hormuz.
Also on Wednesday, the Prime Minister, Luís Montenegro, announced that Portugal will make available “in principle” 10% of strategic oil reserves so that there can be more supply and greater containment in fuel prices.
Despite this announcement, the price of Brent oil for delivery in May rose 2.67% on Friday, closing above 103 dollars per barrel in one of its most volatile weeks in recent years
The US and Israeli offensive against Iran led to the suspension of maritime traffic through the Strait of Hormuz, which connects the Persian Gulf to the Gulf of Oman, due to Iranian threats against ships crossing this route, responsible for up to a fifth of the world’s oil.
Leave a Reply