The US has held strategic oil reserves since the end of WWII. During the 60’s these reserves were grossly mismanaged mainly due to special interest groups. Congress held a special investigation and it was determined that specialized reserves, including rare minerals and metals, were to be kept for strategic purposes. These were also to be strictly maintained in case there was ever an actual war.
These reserves are vital, without them the US military will completely shut down. We are fighting a war in Afghanistan, still supporting a war in Iraq, just entered a war in Libya and the entire Middle East is having a bloc party. So the only logical reason for releasing the oil is to lower US gas prices. But I thought the president said his policies were going to fix all this?
From the LA Times
U.S. and allies to tap into oil reserves
A surprise move to tap government oil reserves could slash painfully high gasoline prices this summer and give the U.S. economy a much-needed boost, but the rare action underscores the challenge posed by the weakening recovery.
But Brian Wesbury, chief economist at First Trust Advisors inWheaton, Ill., called tapping the reserve “an act of economic desperation.”
Although the price of crude had already dropped in recent weeks, it remains well above its June 2010 level of about $75 a barrel, in part because the fighting in Libya has stripped about 1.5 million barrels of oil a day from global supplies.