English 
Spanish 
4 min read
0 comments
The United States purchased 6 million barrels in September from Exxon Mobil, Shell and Macquarie for its Strategic Petroleum Reserve.
Oil prices were falling until the recent conflict between Iran and Israel. Escalating tensions in a key oil-producing region have sent Brent prices soaring, though not enough, thanks to U.S. preparedness.
What is the US doing?
The United States has begun ramping up its oil stockpiling. In September, it bought 6 million barrels from Exxon Mobil, Shell and Macquarie for more than $411 million, a cheap price given the low prices before the Middle East conflict. Starting in October, they will only have enough money in their Strategic Petroleum Reserve (SPR) purchasing funds to buy about 2 million more barrels. The goal is to keep filling the SPR by asking Congress for more money or canceling future sales.
The SPR strategy
The United States Strategic Petroleum Reserve is the world's largest emergency oil reserve, created in 1975 after the 1973 oil crisis. Its purpose is to protect the American economy against global conflicts that affect oil supplies, as happened during the Gulf War, Hurricane Katrina and the Covid pandemic.
- Petrobras as an investor? Brazilian state-owned company to mine Bitcoin
- End of oil? No way! Petrobras extends the lifespan of its first large pre-salt platform
- The Oil Market: What’s Behind the Price Fluctuation Above $80?
- In 1858, this man 'discovered oil', but he was not recognized and died in complete poverty.
SPR oil is stored in underground natural salt caverns in the states of Louisiana and Texas, on the Gulf of Mexico coast. The last major sale in history was in 2022, when President Joe Biden released 180 million barrels in response to price spikes caused by the war in Ukraine.
How is the price of oil?
On Wednesday, October 2, at 2 pm, there was an increase of more than 6% and another of 3,9%, due to the possible attack by Iran on Israel in retaliation for the death of the leader of Hezbollah and the Israeli invasion of southern Lebanon. However, the increase in oil reserves in the United States by XNUMX million barrels and the announcement by OPEC+ to maintain its plan to increase production helped to contain the increase in prices and moderate the market.
OPEC+ and Iran
In the face of the escalating conflict, the Organization of the Petroleum Exporting Countries and its allies (OPEC+, the “plus” refers to non-member countries such as Russia, Kazakhstan and Mexico) stated that they had sufficient capacity to cushion the impact a total loss of oil supplies from Iran, which produces about 3,2 million barrels per day. However, if other Gulf states, such as Saudi Arabia or the United Arab Emirates, enter the conflict, OPEC+’s capacity would be limited at best.
On the other hand, OPEC+, led by Saudi Arabia and Russia, has decided to maintain its plan to increase oil production from December 1, to get rid of the large production cuts of the last two years. However, the conflict is intensifying and will increase the price of barrels, without being able to stabilize.
Has China spoken out?
From the world's largest oil importer, we only have one piece of information from last week, which is that the People's Bank of China had to reduce its reserve requirement ratio by 0,5%. It also cut interest rates to stimulate its stock market and real estate sector. In addition, China's economic package is an important factor, as if demand increases and supply remains limited, this could generate a positive boost to oil prices. However, there is no update yet.
How does this affect our consumption?
The price of Brent, the benchmark oil for Europe, has risen to almost $77 per barrel due to the conflict situation. For this reason, any interruption in the supply of this barrel in the Middle East could increase energy costs, as its price is linked to the global oil market, although it is exported “locally” in the North Sea.
Furthermore, it impacts inflation in European countries, increasing the prices of basic goods and services for consumers. The effects will be felt in transport and heating, but there are already alternatives that are having an effect.
Energy alternatives in the face of oil volatility
Investment in clean energy has grown significantly, surpassing fossil fuels. These renewable systems are increasing self-consumption in different European countries. We are seeing how the use of renewables impacts our energy system. In addition, the adoption of electric vehicles and other energy efficiency measures also contribute to reducing dependence on oil.
