US to Buy 77Mln Barrels of Oil to Protect Industry, Starting With 30Mln - Energy Dept.

WASHINGTON (Pakistan Point News / Sputnik - 19th March, 2020) The United States will buy a total of 77 million barrels of American-produced oil to top up the country's petroleum reserves in order to provide relief to the industry ravaged by demand lost due to the coronavirus crisis and low prices, the Department of Energy on Thursday said in a statement on Thursday.

"At the direction of the President of the United States, Donald J. Trump, the Department of Energy (DOE) will fill the Strategic Petroleum Reserve (SPR) to its maximum capacity by purchasing 77 million barrels of American-made crude oil," the statement said. "Under this initial solicitation, DOE will purchase up to 30 million barrels of sweet and sour crude oil with a focus on small to midsize US oil producers."

US Energy Secretary Dan Brouillette said in the statement that the DOE would move quickly to support US oil producers "facing potentially catastrophic losses from the impacts of COVID-19 and the intentional disruption to world oil markets by foreign actors.

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The SPR, which holds the nation's oil reserves in underground salt caverns in Louisiana, has a capacity of 713.5 million barrels. As of March 15, total volume of crude in its hold was at 649.1 million barrels, according to data from the Energy Information Administration, a division of the DOE.

US crude oil prices fell to 18-year lows of around $20 per barrel on Wednesday as demand destruction from the coronavirus crisis was exacerbated by production hikes in the global market by Saudi Arabia and Russia.