The country’s emergency oil stockpile is down to about 340 million barrels, its lowest point since 1983, according to Energy Department data released on a Monday in mid-June.
The drop comes as the Trump administration works to finish a plan to release 172 million barrels from the Strategic Petroleum Reserve. The Energy Department announced that plan in March, as part of a coordinated effort by countries around the world. It came less than two weeks after the U.S. and Israel launched attacks on Iran. The aim was to ease fuel prices that had shot up with the war.
If the plan is completed, it will be the second-largest release in the reserve’s history. About 243 million barrels would be left, roughly a third of authorized capacity.
Little room left
Patrick De Haan, head of petroleum analysis at GasBuddy, said the reserve needs between 150 million and 200 million barrels to work properly. “That leaves little room for additional releases,” he said in an interview.
An Energy Department spokesman said the administration is using the reserve the way it was meant to be used: to steady oil markets, shield the country from supply disruptions and improve energy security.
The barrels are going out through an exchange program. Companies borrow the oil and must return it later with interest. The spokesman said about 26 per cent has come back so far, which could save taxpayers more than $3 billion. He added that the department plans to refill the reserve within the next year, with 20 per cent more than was released.
A reserve already drawn down
The reserve was created after the Arab oil embargo of the early 1970s. It was already well below full when Trump took office 16 months ago. Joe Biden’s administration pulled roughly 290 million barrels out through a series of releases, among them one after Russia’s invasion of Ukraine. Republicans argued at the time that the aim was to lower gasoline prices before the 2022 midterm elections, not to answer a real supply emergency. Trump pledged to refill the reserve, which holds about 700 million barrels when full, and criticized Biden for emptying it.
The low point arrives as the U.S. and Iran have reached an interim peace agreement to reopen the Strait of Hormuz and work toward ending the 15-week war. Global crude futures are still up about 20 per cent since the fighting began. U.S. gasoline averages around $4.07 a gallon, which is putting political pressure on Trump ahead of November’s midterm elections, where control of Congress is at stake.
