President Donald Trump’s proposal to sell half of the U.S. strategic oil reserve highlights a decline in the biggest oil user’s reliance on imports – and a weaning off OPEC crude – as its domestic production soars.
The U.S. Strategic Petroleum Reserve (SPR) , the world’s largest, holds about 688 million barrels of crude in heavily guarded underground caverns in Louisiana and Texas.
Congress created it in 1975 after the Arab oil embargo caused fears of long-term spikes in motor fuel prices that would harm the U.S. economy.
The White House budget, delivered to Congress on Tuesday, proposes to start selling SPR oil in fiscal 2018, which begins on Oct. 1. Under the proposal, the sales would generate $500 million in the first year and gradually rise over the following years.
A release of half the SPR over 10 years equals about 95,000 barrels per day (bpd), or 1 percent of current U.S. output.
The drive to reduce the SPR started under former President Barack Obama, and several sales were approved in legislation from 2015 and 2016.
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