Oil Reserves Would Be Used to Calm Wartime Market
The United States will use its nearly 600-million-barrel petroleum reserve to stabilize oil prices in the event of war in the Persian Gulf, a U.S. Embassy official said today.
The official, who spoke on condition of anonymity, commented after U.S. Energy Secretary James Watkins met Sunday with his Saudi Arabian counterpart, Hisham Nazer.
Watkins arrived Saturday for talks on the oil market situation in light of Iraq’s four-month-old occupation of Kuwait.
Saudi official statements said only that the two discussed the world oil market and means of stabilizing it as well as bilateral cooperation in the oil industry.
“They discussed U.S. plans to use strategic petroleum reserves in case hostilities broke out and a real shortage emerged,” the U.S. diplomat said. “People tend to panic when a conflict breaks out, but we’ll do whatever we can to maintain stability.”
The United States, Germany and Japan together have about 1 billion barrels of oil in reserve. Saudi Arabia’s reserves stand at about 260 billion barrels. Two months ago, President Bush said the United States would sell 5 million of the 590 million barrels stored in Texas and Louisiana in an attempt to stabilize prices.