The Clap
Oil prices fell by more than $5 a barrel after reports showed that the U.S. government plans to release about one million barrels per day from its strategic reserves for several months.
The deets
The total release could reach 180 million barrels, which would make it the largest withdrawal from the strategic fuel reserves since its inception in 1974. In doing so, the U.S. will join the efforts made by its allies & the International Energy Agency (IEA).
Impact on the market
The move is likely to be insignificant, said Victor Shum, vice president of consulting at S&P Global.
This is because NATO members currently buy more than half of Russia’s exports of oil & refined petroleum products, which amount to 7.5 million barrels per day.
Shum believes that any loss in Russian shipments can be replaced by increased production from Saudi Arabia & the UAE, as well as the release of the countries’ reserves for several months.
