Australia has signed an agreement with the U.S. to access oil reserves with the aim of benefitting from historically low oil prices, according to the Australian Broadcasting Corporation (ABC) on Wednesday.
"I signed an agreement with the United States to access their reserves, simply because we don't have the storage space here in Australia right now," Australia's energy minister Angus Taylor said.
The government will spend $94 million for oil storage in the U.S. to ensure Australia has enough fuel in case of future “global disruptions", Taylor said.
"Now is the time to buy fuel, and we are doing that,” he added.
The energy minister said that Australia currently has around a month worth of fuel, but the government aims to have much bigger reserves.
WTI crude oil fell Monday into negative territory for the first time in history. The price of WTI under the futures contract, which expires Tuesday, fell to as low as -$37.63 by plummeting more than -290%, indicating that the massive oversupply against low demand is forcing suppliers to pay buyers to unload their inventory.
Brent crude oil dived below the threshold of $20 per barrel on Tuesday. It fell to as low as $18.02 per barrel, marking its lowest level since February 2002, at 0935 GMT for a 29.27% daily loss after it closed Monday at $25.48 a barrel.
OPEC+ oil producing nations agreed on April 12 to cut their total oil production starting from next month -- a decision that came a month late having previously met in Vienna, Austria on March 6.
The one-month delay to curb output, on top of implementing cuts from May 1 onwards, has left the global oil market with an excess of supply to add to the glut, which in turn has dramatically pushed down crude prices.
By Sibel Morrow