Strategic Oil Reserve Being Tapped To Offset Lost Crude

"The U.S. and its partners in the International Energy Agency have decided to release a total of 60 million barrels of oil onto the world market over the next 30 days to offset the disruption in the oil supply caused by unrest in the Middle East," the White House just announced.

Of that, 30 million barrels will come from the United States' Strategic Petroleum Reserve.

"We are taking this action in response to the ongoing loss of crude oil due to supply disruptions in Libya and other countries and their impact on the global economic recovery," Energy Secretary Steven Chu said in a statement issued by his department. "As we move forward, we will continue to monitor the situation and stand ready to take additional steps if necessary."

As The Wall Street Journal notes, "the administration has faced growing pressure in recent months to release oil from the reserves as a shortfall in supplies has pushed gasoline prices upward. Until now, the administration had declined to tap into the reserves, saying the stored oil should only be released during major supply disruptions."

Currently, the reserve holds about 727 million barrels of oil, which the energy department says is a historic high.

Nobuo Tanaka, executive director of the IEA, says in a statement that this is just "the third time in the history of the International Energy Agency" that its members "have decided to release stocks."

"I expect this action will contribute to well-supplied markets and to ensuring a soft landing for the world economy," Tanaka added.

The Associated Press says key oil prices have fallen about 4 percent in trading today, in part because of the announcement but also because traders view Federal Reserve Chairman Ben Bernanke's comments Wednesday about economic growth being weaker than previously thought as a sign that demand for energy may also soften.