Where the World Stores Its Emergency Stockpiles of Oil

Attacks on Saudi Arabian oil facilities have sharpened the focus on the world’s ability to absorb massive shocks to its energy supplies and raised pressing questions about emergency stockpiles around the globe.Some 5% of the world’s global oil supplies were knocked out in the Sept. 14 strikes. Saudi Arabia has said half of that production has been restored, and has dipped into its own reserves to satisfy customers. The Wall Street Journal reported Thursday that Saudi Arabia has also reached out to foreign producers including Iraq for crude and other petroleum products to bridge any gaps. The Saudi energy minister said normal production will resume by the end of the month, though some officials have suggested it may take longer.

Concerns remain high among oil industry players about Saudi Arabia’s vulnerability to future disruptions. A key backup in the event that Saudi production is hampered again are substantial oil stores hidden away in tanks and salt mines in governmental emergency stockpiles in the U.S., China, Japan, Germany and France. “In the past the Saudis have always been able to step up to the plate and meet what’s missing,” said Ann-Louise Hittle, vice president of oils research for energy consulting firm Wood Mackenzie. “This is a different situation because the country with the greatest spare capacity is the one hampered.” Brent crude, the global benchmark for oil, initially rose 3% Thursday after the Journal’s report and ended the day up 1.7%. The kingdom has traditionally been the only country with meaningful spare capacity—supply that can be quickly turned on in an emergency.

Should the disruption surpass about 150 million to 300 million barrels over 30 to 120 days, it would exceed the market’s ability to plug the gap, according to

IHS Markit

That would mean “global markets will look to extraordinary measures” such as a coordinated release of petroleum reserves from the International Energy Agency, a group of about 30 oil-consuming nations, including the U.S., that coordinate on energy security and supplies, the market-data provider said. The agency said Wednesday it doesn’t see the need for release of emergency supplies at the current time. The agency generally advises member states to release oil from strategic reserves if an outage equates to 7% or more of global supply.

The last time the IEA coordinated the release of oil by member countries was in June 2011, when it arranged the dispersal of 60 million barrels after the Libyan civil war disrupted global supplies. As of July, the 36 industrialized nations that belong to the Organization for Economic Cooperation and Development had roughly 1.5 billion barrels of oil in emergency government reserves, according to IEA data.

On Sept. 15, President


said on Twitter that he was authorizing the release of crude from the Strategic Petroleum Reserve to keep markets well supplied, if needed. The SPR has about 644.8 million barrels, worth more than $35 billion at current prices. Other OECD member countries including Japan, Germany and France each keep more than 100 million barrels in stock. China, which isn’t an IEA member, doesn’t disclose the exact size of its reserves, but keeps an estimated 344 million barrels, according to oil-tracking service Kpler. The U.S. barrels of both sweet and sour crude oil are stored in underground salt domes in four locations in Texas and Louisiana. These man-made, cylindrical caverns are as long as 2,000 feet. To take oil out, fresh water is pumped into the bottom of the cylinder, forcing the oil upward and out of the cavern. But it can take as long as two weeks for oil from the U.S. reserves to make it to markets. And there aren’t enough pipelines and export terminals to carry out the reserves to match the 5.7 million barrels of lost Saudi output.

The U.S. has also been slowly selling down oil from the SPR for a few years, with the most recent transaction being in late August when it divested the reserve of 10 million barrels. In 2010, at its peak, the country held about 726 million barrels. That was about eight days of global supply, or enough to satisfy U.S. demand for more than a month. Saudi Arabia itself has as much as 80 million barrels of crude oil stored within its borders available for exports, according to estimates from IHS Markit on Sept. 16. The kingdom also has reserves of oil stashed around the world, with approximately 40 million barrels in Japan, the Netherlands and Egypt among other locations, according to Kpler. —Russell Gold contributed to this article.

The Sept. 14 attack on a Saudi oil facility could have long-lasting repercussions. Heard on the Street editor Spencer Jakab explains how it could impact the global markets. Photo: Hamad I Mohammed/Reuters

Write to David Hodari at David.Hodari@dowjones.com and Caitlin Ostroff at caitlin.ostroff@wsj.com

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