Much has been made in the energy markets lately of the intentions of OPEC, whether the extension of the production cuts will have the desired effect upon oil stocks, and the markets reaction. What hasn’t been discussed however, is that if the production cuts were effective one man could decide to restore oil stock to record highs almost instantaneously. That man is of course, the most powerful man in the world.

This week President Donald Trump publicly considered the option of selling half of the United States’ Strategic Petroleum Reserve to help pay off the national debt. There are currently around 700 million barrels of oil in the Strategic Reserve which means half would be around 350 million barrels. OPEC’s stated goal is to reduce global oil inventories from a record high of 3 billion barrels to 2.7 billion barrels which is the five year average. While the current plan calls for a gradual release of the strategic reserve over several years, President Trump is notoriously unpredictable, and many consider keeping oil prices low to be in the best interests of the US.

The idea for the Strategic Petroleum Reserve goes back more than 40 years to the oil shocks of the 1970s. At that time OPEC decided to impose an oil embargo upon the West, which drove prices up dramatically and led to shortages in the United States. This caused many members of the International Energy Agency including the United States to agree to keep a 90-day supply of oil imports available in government and private stockpiles. The intention of course, was to prevent another unexpected shortage from having the same calamitous effects.

As a result there are nearly 700 million barrels of crude oil sitting in tanks and underground salt caverns throughout Louisiana and Texas. However, the strategic situation for the United States has changed drastically from the 1970s to today. At the end of 2015 Congress agreed to put an end to a ban on exports of oil from the US, a policy which had been in effect since the 1970s.

Since that time the US has increased it oil production capacity and is expected to overtake Saudi Arabia as the world’s second largest oil producer within a decade. As such many now consider the Strategic Petroleum Reserve to be a relic of a bygone era and the sale of half of it would have little effect upon national security.