The Energy Department promised Thursday to support US oil producers facing "potentially catastrophic losses" by quickly purchasing 30 million barrels of crude.
Those barrels, purchased at dirt-cheap prices, will be used to start filling up America's emergency oil stockpile, known as the Strategic Petroleum Reserve, or SPR.
The initial purchase will be focused on small and midsize US oil producers, the group most at risk from the oil crash to $20 a barrel.
Treasury Secretary Steve Mnuchin said he will recommend to President Trump that he request funding from Congress to buy even more crude — enough to fill up the SPR.
"At $22 for WTI crude, we should be filling up the reserve for the next 10 years," Mnuchin said on Fox Business Thursday morning.
Mnuchin said the oil market has "nothing to do with the coronavirus, other than there's just a lot less demand."
That's not exactly right: The demand destruction, caused by mass cancellations of flights and widespread factory shutdowns, is a major driver of the oil crash.
The other huge problem: Saudi Arabia and Russia are flooding the market with too much supply in a bid to crowd out high-cost US producers.