These are the options of the world powers against the rise of oil – Prensa Libre

What are strategic reserves?

The International Energy Agency (IEA), formed mainly by European and American states, obliges its members to have reserves ofand at least the equivalent of 90 days of net imports of oil (calculated in reference to the previous year).

The fulfillment of this obligation It is directly supervised by the State or private companies.

In June 2019, French reserves corresponded for example 111 days of net imports, According to the agency.

The IEA indicated on Monday that it was “Closely monitoring the situation in Saudi Arabia” and affirmed that "at the moment the markets are well supplied with numerous commercial reserves".

Outside the IEA, China, the first oil importing country and major energy consumer, has strategic oil reserves equivalent to 40 or 50 days of net imports, according to a figure quoted in March by official Chinese media.

USA UU. and Saudi Arabia, willing to mobilize their reserves

“I authorized the use of oil from the Strategic Petroleum Reserve (SPR), if necessary, in an amount yet to be defined ”, US President Donald Trump announced on Twitter after the attack, which halved the production of Saudi Arabia, the world's leading exporter.

US strategic reserves (called SPR) are deposited in four underground plants on the shores of the Gulf of Texas and Louisiana.

September 13 they were 645 million barrels, according to the United States Energy Information Administration (EIA). This amount represents about 275 days of net oil imports from the United States in 2018.

U.S He put part of his reserves on sale three times in his history: in 1991, when he launched a military operation after the invasion of Kuwait by Iraq, in 2005, during the hurricane Katrina, and in 2011, when there was an uprising in Libya.

Saudi Arabia also promised to mobilize its important reserves in case of an oil crisis. The country has in reserve “Significant levels of oil and petroleum products” equivalent to “about 35 days of exports from the country,” says Amarpreet Singh, an analyst at Barclays.

When will reservations be used?

“Until damage is required (to Saudi facilities) it will be difficult to assess exactly the possibility ” to resort to strategic reserves, says Bob McNally, director of the Rapidan Energy consultancy, cited by the Bloomberg agency.

The Standard and Poor’s agency said Monday that provides for a reduction in Saudi production in three million barrels a day for a month.

The country produced an average of 9.77 million barrels per day in August and exported on average seven million barrels a day, according to S&P.

At the moment “the administration (Trump) seeks to reassure markets, ensuring that the United States and its partners within the IEA are willing to act, ”says McNally.

Another option: increase production

The Organization of Petroleum Producing Countries (OPEC), which leads Saudi Arabia, in August had exceeding capacities of 3.21 million barrels per day but in the majority (2.27 mbd) they are in Saudi Arabia, according to the IEA.

“The attack (of Saturday) questions the reliability of supplies ” from Saudi Arabia, "which has the most surplus production capacity on the planet," says Amarpreet Singh.

The other cartel members with unused capabilities (mainly Kuwait and United Arab Emirates) could make up for the lack of Saudi oil But there are no guarantees that it is enough.

Another unknown is the ability or will of Russia, the second world oil exporter, to increase its production. That would require that Russia, which is not a member of OPEC, waive its current agreement with the cartel to reduce production.

U.S, the first oil producing country, It could also increase its own offer, particularly that of its shale hydrocarbons.

But this option has its limits because his oil is light and cannot replace heavy oils from the Middle East. In addition, US infrastructure and ports are already saturated.

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