Strategic Petroleum Reserve Tapped To Ease Break In Libyan Supply
The International Energy Agency announced Thursday that the U.S. will tap the strategic petroleum reserves in an attempt to deal with distribution disruptions in Libya.
“We are taking this action in response to the ongoing loss of crude oil due to supply disruptions in Libya and other countries and their impact on the global economic recovery,” said Energy Secretary Steven Chu in a statement.
The strategic petroleum reserve’s 60 million barrels represent 30 days’ worth of Libyan oil production, which has been disrupted due to the conflict there. Half of the oil released will come from the U.S. The other half will be provide by the international agency’s 28 member countries.
The New York Times reported that the move will ease U.S. demand for North African oil, freeing up supplies to go to Europe, which is particularly dependent on oil from Libya.
Releasing the strategic petroleum reserve will allow the Obama administration to stabilize global oil prices and lower energy costs for businesses and consumers in the U.S. ahead of the summer driving season.