US to sell oil from strategic reserves

The US has confirmed it is to sell oil from its strategic reserves for the first time in more than two years, and under circumstances that have not been seen since Iraq invaded Kuwait in 1990, resulting in the Gulf War.

The country has announced its first "test" sale of oil from its petroleum reserve, which is seen as a move to underline its ability to respond to any energy market turmoil that may result from the crisis in the Crimea.

According to the US Department of Energy, the planned release of up to five million barrels of oil is only less than one per cent of its total 696 million barrels in reserve, and is intended to "appropriately assess" the system’s capabilities in the event of disruption.

Despite the White House claiming it is not associated with the situation in Ukraine and the energy department claiming it had been planned for the time of year when refineries stock up for the summer, analysts suggested the timing of the first test sale in 24 years is more than coincidental and will send a signal to Russia after its move into Crimea.

Furthermore, the oil to be released is high in sulphur (also known as sour), which is like much of the oil exported from Russia, and further indicates that the test will assess the system’s readiness to cope with a disruption of Russian supplies.

The US's strategic oil reserves are occasionally released for various reasons, most recently in 2011, though this is the first since 1990 that it has been described by the government as a test sale.

The previous release - in 2011 - came after the US joined with other International Energy Agency members to release stocks to offset the loss of supply on world markets caused by the Libyan civil war.