Topping Off The Tanks

After Saddam Hussein invaded Kuwait in 1990, oil prices spiked to $40 per bbl., creating anxiety among consumers and a recession for then President George Bush. Now his son is taking steps to make sure history does not repeat itself. The Bush Administration has been quietly pumping as much as 150,000 bbl. of crude oil a day this fall into the nation's Strategic Petroleum Reserve. The unheralded buildup has brought emergency stockpiles of petroleum to their highest level in history: nearly 600 million barrels. That ensures that in the event of war, President Bush can order the release of more than 4 million bbl. a day onto the market for at least 20 weeks more than enough to compensate for Iraq's average daily exports of roughly 1 million bbl.

The Pentagon is also purchasing extra jet and diesel fuel, much of which is being stockpiled overseas, in quantities not seen since the Gulf War. American allies could help, as they did during the Gulf War, by releasing part of their industry and government petroleum stockpiles. Even the Organization of Petroleum Exporting Countries is doing its part: heavyweights such as Saudi Arabia have opened the taps, helping America fill the reserve's salt caverns in Texas and Louisiana with crude. U.S. oil prices, meanwhile, have fallen 15% since late September, to around $26.50 per bbl.