Mar 13, 2020 - Energy & Environment

Trump to buy oil for nation’s strategic reserves

President Trump. Photo: The Washington Post / Contributor

President Trump will direct the Energy Department to buy oil for the nation’s strategic stockpile to boost prices and help the oil industry reeling after the market’s historic collapse this week.

The big picture: America’s Strategic Petroleum Reserve was created in the 1970s to ensure the U.S. has oil in case of an emergency. Today, Trump is buying oil for the reserve because of an emergency.

Between the lines: Global oil markets are facing an unprecedented double whammy of too much oil and too little demand, the latter exacerbated by the coronavirus. The industry was tanking before the pandemic, and now this health crisis has accentuated all of the sector’s woes.

Flashback: Congress had been selling oil from the SPR in recent years, given it wanted money and we're awash in oil that lessened our sense of energy insecurity.

The intrigue: The historic drop in oil prices is leading to rock-bottom gasoline prices, which is good for drivers venturing out amid the coronavirus crisis.

What we’re hearing: The oil market’s response has been “appropriate restrained,” according to Ed Crooks, a Wood Mackenzie analyst and former Financial Times reporter. Global oil prices are up about 5% on the day.

Go deeper: The big picture on coronavirus and oil demand

Go deeper

Trump calls to fill up more places with oil

President Trump is calling on the Energy Department to find more places to store oil, in the wake of rock-bottom prices and an ensuing economic collapse of the sector itself.

Driving the news: Trump’s comments came Friday during the televised portion of a meeting he hosted with industry CEOs to discuss ways to help the sector. It’s reeling from a historic drop-off in demand with the world shutting down to slow the spread of the coronavirus.

Coronavirus crisis tests Trump’s love for cheap oil

Illustration: Eniola Odetunde/Axios

President Trump is working to help an oil industry imploding as the coronavirus crisis chokes demand, but listen closely and you’ll hear his enduring love for cheap prices.

Why it matters: He’s like most Americans, who worry about energy only when it’s expensive or gone. As president, Trump has been slow and uneven in responding to the sector’s turmoil because of his inclination to cheer rock-bottom prices.

Trump opens door to imposing tariffs on oil imports

Photo: Jim Watson/Getty Images

President Trump inched closer to supporting tariffs on oil imports on Saturday as one way to help the industry in historic turmoil over rock-bottom prices.

Why it matters: More than 70 oil companies could go bankrupt in the coming months, consultancy Rystad Energy said Friday, if U.S. oil prices are around $30 a barrel — which is above where they’ve been lately.