ABSTRACT
Petroleum inventories have commercial and strategic implications. In the commercial sphere, the level of petroleum inventories is an indicator of the direction of oil prices in the short term, and a force directly influencing oil prices. As a direct force, the importance of inventories on oil prices has increased since 1978. This increase is due in the first place to the very large size of the storage sector of the oil industry. The system's capacity makes it possible for large volumes to go into and out of the storage system. The size of the flows has become larger since 1978 as a result of the increased uncertainty about the security of supply (1979-81), the decline in demand (1982-1985), and changes in the relations between exporting country governments and oil companies. In the strategic sphere, the increase in government-owned emergency stocks has changed the balance of power in future efforts by oil exporters to impose embargoes or sharp price increases.
