Strategic oil reserve refers to the oil reserve set up by a country to cope with the fluctuation of oil supply, with the purpose of ensuring national energy security and avoiding the interruption of crude oil supply in unexpected situations. In addition, when the international oil price fluctuates abnormally, it can also play a role in stabilizing prices.

At that time, Arab oil-producing countries in the Middle East imposed an oil embargo on western developed countries, and developed countries jointly established the International Energy Agency in response to the crisis, requiring member countries to reserve the crude oil needed for at least 60 days.

In the late 1970s and early 1980s, influenced by the Islamic Revolution in Iran and the Iran-Iraq War, the "second oil crisis" broke out in the world. The shortage of oil supply caused the international oil price to soar, which further stimulated the International Energy Agency and its member countries.

By 200 1, the international energy agency reached an agreement requiring all its 28 member countries, except the net energy exporters, to reserve their net crude oil imports for 90 days.

The Significance of Strategic Petroleum Reserve System

The main economic function of strategic reserve is to relieve the psychological pressure of the market by releasing the reserve oil to the market, thus reducing the possibility of rising oil prices and reducing the impact of oil supply on the overall economy. For oil importing countries, strategic reserve is the first line of defense to deal with the shortage of oil supply, but its real function is not to make up for lost imports, but to curb the rise of oil prices.

In addition, the strategic oil reserve has the following functions: it can buy time for adjusting the mode of economic growth, especially the mode of energy consumption. Can play a deterrent role, so that artificial supply shocks do not occur or do not occur frequently.

When the Organization of Petroleum Exporting Countries (OPEC) alternately implements the policies of "reducing production and ensuring price" and "increasing production and ensuring price", the strategic reserve can stabilize the economy and politics of importing countries and will not be affected by man-made oil supply shocks.