S.P. aRe Becoming Irrelevant?

The recent flux in light-sweet crude oil supplies in the Atlantic Basin highlights the United States’ recent strides towards crude oil self-sufficiency. Although short-term upward pressure on crude oil prices appears to have temporized for the moment, threats to supply, if only perceived, can have wild impacts. Typically, if crude oil prices get too high, the powers that be in Washington reach for the Strategic Petroleum Reserve (SPR) taps. While the tenet of the SPR is expressly to meet supply shortages, moderating price levels for consuming constituents is certainly an added benefit. According to the US Government, “If hurricanes or other unexpected physical conditions disrupt either crude oil imports or domestic production, the Strategic Petroleum Reserve (SPR) is ready to make replacement oil available to the extent approved by the President and/or the Secretary of Energy.” However, now that the United States is awash in crude oil, the SPR’s utility as a political tool is significantly reduced. Download here