US, WASHINGTON (ORDO NEWS) — US President Donald Trump’s administration plans to lease space for energy companies to store oil in the country’s strategic oil reserves after canceling previous efforts to purchase millions of barrels for emergency stocks due to lack of funding, two informed sources reported.
The new plan may help the United States cope with an oversupply of crude oil that threatens to flood commercial warehouses and push global energy prices further down in light of lower fuel demand due to the Coronavirus epidemic. The two sources said the plan would be announced soon, possibly on Wednesday.
This plan is a change to an initial plan that requires the Ministry of Energy to purchase crude from local oil exploration companies using federal funds.
On March 13, Trump ordered the Energy Department to fill up reserves to help oil producers suffering from falling global oil prices.
But Congress did not approve the purchase funding, forcing the ministry to cancel the proposal last week.
But the revised plan would help traders and others trying to survive the sharp drop in fuel prices by storing crude for sale later once the crisis is over.
The Energy Department has not yet responded to a request for comment.
A price war between Saudi Arabia and Russia, which erupted earlier this month, is exacerbated by flooding the market with crude.
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