US Opens Emergency Oil Stockpile In Signal To Putin

By Andrew Critchlow

The US has released oil in a “test drawdown” from its strategic reserve – a rare move that could be interpreted by the market as a warning to Russian President Vladimir Putin not to use energy as a weapon in its dispute over Ukraine.

Buyers have until March 14 to purchase up to 5m barrels of crude the government has decided to release from the Strategic Petroleum Reserve, a stockpile set up in 1975 to protect the world’s largest economy from energy shocks.

The energy stockpiles were first seriously tapped by the US government in 1990 as coalition forces launched military action to evict Saddam Hussein’s Iraqi forces from Kuwait. In 2005, 11m barrels were released in response to Hurricane Katrina and in 2011, Washington again offered to place crude on the market from the reserve to ease pressure on markets after Libya’s production was knocked out by the civil war.

Russia is the world’s largest oil producer, ahead of Saudi Arabia and the US, which has raised concerns among security and energy experts that it may use its vast energy reserves if pressured by the international community over the political situation in the Ukraine.

“With Russia’s invasion of Crimea, the threat is greater than Vladimir Putin’s ambitions, the real danger to the world is that oil and natural gas are once again being used as a weapon of war,” warned respected American energy financier T Boone Pickens in a Forbes column this week.

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