Kathmandu — Global crude oil prices continue to surge due to the ongoing conflict involving Iran, and experts warn that a price drop is unlikely in the near future. According to economist William Lee, even if the United States begins releasing oil from its Strategic Petroleum Reserve (SPR), the impact on global markets will likely remain limited. Lee noted that while such a move might provide a temporary psychological boost to the market, it does not significantly increase the actual global supply.
The United States currently holds approximately 415 million barrels of oil in its reserves. However, Lee pointed out that transporting this oil to the necessary regions takes considerable time, making it difficult to provide immediate relief to the global energy crisis. He emphasized that the current logistical hurdles mean that a U.S. release alone cannot act as a quick fix for the rising costs.
At present, the highest demand for oil is concentrated in Asia, particularly in countries outside of China. Supplying oil from the U.S. to these Asian markets is both logistically challenging and time-consuming. Because of these geographical barriers, the Western supply is struggling to meet the urgent needs of Eastern economies effectively.
According to William Lee, a significant and sustainable drop in oil prices will only be possible if China decides to release its own massive stockpiles into the market. While China is estimated to hold a vast strategic reserve, the Chinese government has not disclosed official figures regarding its holdings. Furthermore, Beijing has shown no indication that it intends to release its stored oil, leaving the global market in a state of continued uncertainty and high prices.
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