US to Sell 5 Million Barrels of Strategic Oil Reserve
The Obama administration said it plans to sell 5 million barrels of crude from the U.S. Strategic Petroleum Reserve in a test of the distribution system.
The sale of less than 1% of the total stockpile has been scheduled for some time and isn’t tied to turmoil in Ukraine or other geopolitical events, said William Gibbons, a Department of Energy spokesman.
“Due to the recent dramatic increase in domestic crude oil production, significant changes in the system have occurred — including pipeline expansion, construction of new infrastructure, reversed flow of existing pipelines and increased use of domestic crude oil terminals,” necessitating the test, Gibbons said in a statement.
Potential buyers have until March 14 to submit bids for the oil in the reserve, created in 1975 as a way to protect against a severe disruption in supply. Delivery will start April 1 and end April 30, the department said.
“They just want to make sure they can move crude oil through the system,” Robert McNally, president of Rapidan Group, an energy consulting firm in Bethesda, Md., said in a telephone interview. “This is not about geopolitics.”
