Oil reserves.. Is it the best solution to stop rising prices?

Several countries suffer due to the successive global economic crises, which affected their financial liquidity. Are the use of oil reserves a solution to avoid future hikes in oil prices?

What do we mean by oil reserves? 

The petroleum expert, Eng. Mustafa El-Sherbiny, said that the oil reserve is the total stock of oil that can be extracted from under the ground or from the seas in a particular country or in the whole world.

He explained that the measurement of oil reserves is in barrels, which indicates the amount of oil that can be extracted using current and known technology, and the oil reserves are estimated by studying rocks and soil in areas where oil is suspected.

Then the expected amount of oil in those areas is estimated, based on the data available from previous explorations and excavations.

The importance of oil reserves

Many industries depend on oil as a source of energy and fuel, and countries that have large oil reserves can export oil and make large profits from that, which affects the economy and politics in the region and the world.

El-Sherbiny pointed out that the oil reserves are used at certain times, and it is not possible to approach them or authorize their use except by order of the President of the Republic or the ruler of the country.

When is the oil reserve used?

The petroleum expert, Eng. Ahmed Hammad, said that the oil reserve is usually used when a disruption occurs in the regular oil supply, or when crises occur in the energy sector such as breakdowns in refineries or oil transportation networks, or when a shortage of supplies occurs due to conflicts or disasters natural.

Hammad pointed out that countries usually use oil reserves to maintain stability in oil prices and ensure adequate supplies for companies and consumers. In some cases, oil reserves can be used as part of an energy security strategy to reduce dependence on imported oil.

He pointed out that oil reserves are usually stored in oil depots and refineries designated for this purpose, which are run by governments or official bodies responsible for energy in countries.

Does the use of oil reserves limit the rise in prices?

The economist, Dr. Hani Kamal, believes that the oil reserves alone cannot control the high prices of oil supplies, because this matter is affected by many other factors, such as the supply and demand for oil, geopolitical turmoil, and economic developments in the consuming countries.

However, the use of oil reserves can help reduce oil price volatility, reduce the negative impact of emergencies and fluctuations in oil supplies.

He continued: “It is important for governments and companies to adopt effective policies and strategies to manage oil reserves and ensure their availability in emergency situations, to reduce the impact of oil supply disruptions on global markets and economies.”