Due to low demand in the markets, the storage capacities of US oil companies have collapsed.
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Donald Trump announced Wednesday that his Administration will soon make public a plan to help American oil companies, in order to drain the growing excess of crude that they no longer have anywhere to keep. Treasury Secretary Steven Mnuchin announced that the State could be in charge of storing millions of more barrels, although without specifying where the authorities intend to deposit it.
“We are also exploring the potential capacity to store several hundred million more barrels, so we are considering many different options,” Mnuchin said during a White House press conference on the impact of the new coronavirus pandemic on the industry.
The senior official explained that a team of experts from the Treasury and Energy departments is focused on finding possible storage variants.
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At the moment, in the US Strategic Petroleum Reserve – the largest in the world, with a capacity of about 714 million barrels – there are around 636 million barrels of crude oil. This week Bloomberg reported that the Department of Energy developed space leases for some 23 million barrels in the Strategic Reserve.
The low world demand for crude oil these days has caused the accumulation of the product in warehouses and oil tankers, and US producers no longer have more places to store it, waiting for customers and for the resumption of sales.
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