US announces emergency sale of 30mn barrels of crude oil from strategic petroleum reserve

The United States on Wednesday agreed to release 30 million barrels of crude oil from the Strategic Petroleum Reserves to address significant market supply disruption related to Russia’s unprovoked and unjustified invasion of Ukraine. According to a press release, Washington’s move is a part of a coordinated action with the member countries of the International Energy Agency (IEA) to collectively release an initial 60 million barrels of oil from strategic petroleum reserves, reflecting a “common focus” and willingness to address significant market supply disruptions related to Russian President Vladimir Putin’s war on Ukraine. 

“The US Department of Energy’s (DOE) Office of Fossil Energy and Carbon Management (FECM) plans to issue a Notice of Sale for the 30-million-barrel sale on March 2,” the press note read. 

Now, while 30 million barrels will come from the US Strategic Petroleum Reserve, the other half will come from allies in Europe and Asia. According to CNN, the other allies include Germany, the UK, Italy, the Netherlands and other major European countries, as well as Japan and South Korea. On Tuesday, the IEA had announced that the member countries have agreed to the release from emergency reserves to send a “strong message to global oil markets that there will be no shortfall” as a result of Russia’s invasion of Ukraine. 

Direct energy sanctions remain on table: US 

It is pertinent to mention here that the latest move comes as the invasion of Ukraine has driven concerns about a supply disruption from Russia, which is the world’s No. 2 oil producer. So far, Russian oil and gas exports have not been directly targeted with sanctions, however, traders and analysts report that financial sanctions on Moscow and concerns over the risk of future energy sanctions are already slowing down the sale of Russian oil and gas, though not stopping it completely. Moreover, previously, the US had also signalled that direct energy sanctions remain on the table, as Russia shows no sign of backing off its military assault on Ukraine. 

"We are prepared to use every tool available to us to limit the disruption to global energy supply as a result of President Putin's actions," White House press secretary Jen Psaki said in a statement Tuesday. 

Now, oil markets are waiting for an OPEC+ ((Organization of the Petroleum Exporting Countries) meeting on Wednesday, where experts expect that the organisation will keep to a gradual increase in oil suppliers, rather than accelerate production. 

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