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Definition: Global Strategic Petroleum Reserves (GSPR)
Global Strategic Petroleum Reserves (GSPR) are inventories of crude oil held by governments and private industries for providing security against potential future energy crises. These reserves serve to provide economic and national security during periods of low energy supply. Participant members of the GSPR and the International Energy Agency (IEA) are required to hold minimum reserves of crude oil that can meet 90 days worth of the past year’s net imports of the country.
GSPR serve to meet the short term energy requirements of member countries during times of crippling energy supply that may result from disruptions in the recovery or refinery processes. Forward commercial storage agreements provide increased production flexibility to oil-exporting countries by allowing storage of petroleum at the site of the oil-importing country while still allowing the oil-exporting countries to maintain control over such reserves. Oil-importing countries also benefit from such an agreement as they gain quick access to reserves at lower transactional costs during times of crises
In addition to agreeing to maintain crude-oil stockpiles to meet the domestic needs, member nations also have several agreements to share reserves during times of emergency. The U.S. Strategic Petroleum Reserve (SPR) is the largest stockpile of crude oil supply during an energy crisis and has a capacity of 727 million barrels.