Opec ‘not concerned’ by Trump’s proposal to sell US strategic petroleum reserves

via Tallbloke’s Talkshop
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Credit: ktuu.com

Holding vast stockpiles does seem outdated when you can produce your own at an increasingly rapid rate, thanks to new discoveries and modern techniques like fracking.

US President Donald Trump’s 2018 budgetary proposals, currently before Congress, have irked many and tucked in the fine print is an outrageous (says the IB Times) plan to sell over 50% or 687m barrels of the country’s government-owned strategic petroleum reserves (SPR), stockpiled in the states of Texas and Louisiana as an emergency measure.

The SPR was created by the US government following the 1973 oil crisis, which saw several Middle Eastern Opec members impose an oil embargo following Washington’s backing of Israel in the Yom Kippur War.

Unconcerned by current geopolitics, the Trump administration says the sale could generate $16bn for US taxpayers over the next 10 years.

At a time when the oil market is grappling with supply and demand imbalances, with Opec and 10 non-Opec countries opting to extend their production cuts, the impact of such a sale could be felt.

However, several Opec delegates, departing Vienna, Austria – from the recently concluded ministers’ meeting – told IBTimes UK they are “unconcerned.”

A Kuwaiti source said the sale was a “matter for the US government, while Opec’s task over the next 9 months would be to address the inventory overhang” and bring it down a 5-year average of 2.7bn barrels, from a current level of around 3bn barrels.

A member of Iraq’s delegation privately expressed scepticism whether the proposal would even pass Congress in its current format. “We believe it is being proposed as part of wider budgetary proposals which would be susceptible to amendments and is not something we are concerned about,” said the delegate.

Continued here.