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Oil Stockpiling: Help Thy Neighbor

Saudi benevolence apart, a large inventory of oil is the most effective emergency tool that oil-importing nations could fashion. Long ago, Joseph advised the Pharaoh to prepare for famine by storing during times of plenty. Today virtually every study of policy options for oil supply emergencies emphasizes the value of building and using a large stock of oil to cushion the effects of a sudden loss in supply. And among the array of official pronouncements and promises, oil stockpiling stands out as the most visible and substantial arena of government activity in energy policy, where new institutions and resources have been deployed in the halting beginnings of a coordinated international stockpiling program. The Strategic Petroleum Reserve (SPR) and similar efforts have achieved primacy in the analysis and implementation of oil emergency policy.

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Energy Specializations: Petroleum – Markets and Prices for Crude Oil and Products; Petroleum – Policy and Regulation; Energy Security and Geopolitics – Geopolitics of Energy

JEL Codes:
L13 - Oligopoly and Other Imperfect Markets
E60 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General
Q48 - Energy: Government Policy

Keywords: Oil stockpiling, SPR, US, Oil supply, Energy policy

DOI: 10.5547/ISSN0195-6574-EJ-Vol4-No3-4

Published in Volume 4, Number 3 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.