President Donald Trump ordered the federal government to begin buying tens of millions of barrels of crude oil to be stored in the Strategic Petroleum Reserve Friday, in a bid to aid the domestic oil and gas industry after crude prices collapsed this week.
After declaring the coronavirus outbreak a national emergency, Trump said the purchase at current prices amounted to a deal for taxpayers.
“It’s a good time to fill it up,” he said, speaking at the White House. “We’re going to fill it right up to the top.”
Currently the petroleum reserve, which is spread across Texas and Louisiana and has a capacity of 727 million barrels, only has 635 million barrels of oil in storage.
The announcement represents a break for oil companies, some of whom have been lobbying the Trump administration for a bailout to counter not only the effects of the coronavirus but Saudi Arabia’s decision to begin selling its crude at a discount, in a bid to force producers out of the market.
“We are ground zero for the current economic crisis. The President’s directive to the U.S. Department of Energy to restock the Strategic Petroleum Reserve can help alleviate the oversupply disruptions in the marketplace,” Anne Bradbury, CEO of the American Exploration and Production Council, said in a statement.
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