The Trump administration is working to rent storage space for about 27 million barrels of oil to oil companies with a surplus of oil due to dwindling demand.
According to The Hill:
The Department of Energy (DOE) is moving ahead with its plan to rent storage capacity to struggling oil companies that are running out of space amid a steep drop in demand due to the coronavirus.
DOE is negotiating contracts with nine oil companies that want to use space in the nation’s Strategic Petroleum Reserve (SPR). The deal will use 23 million barrels of capacity in the 77 million barrel tanks.
“When producing oil you have two options — you either use it or you store it. With the impacts caused by the COVID-19 pandemic, we are seeing an enormous decrease in demand as our country works to contain the virus,” said U.S. Secretary of Energy Dan Brouillette.
“Providing our storage for these U.S. companies will help alleviate some of the stress on the American energy industry and its incredible workforce.”
The administration is also using this as an opportunity to fill the strategic oil supply of the United States.