US strategic oil stockpile nears four-decade low as Iran war drags on

The US Strategic Petroleum Reserve has fallen to its lowest level in more than four decades as the Trump administration continues to draw on emergency oil stockpiles to offset supply disruptions caused by the war with Iran and the near closure of the Strait of Hormuz.

For the week ending June 5, the SPR stood at 349.2 million barrels, according to data from the US Energy Information Administration, just above the 345.7 million-barrel low recorded in August 1983.

As of June 5, the Trump administration had released 66 million barrels from the SPR since the war with Iran began on Feb. 28, according to the US Department of Energy. In March, Trump authorized the release of roughly 172 million barrels from the reserve, or around 40% of the available stockpile, with participating companies pledging to replenish it at a later date.

Why it matters: The drawdowns have pushed the SPR toward levels last seen in the early years of the Reagan administration. The reserve held 345.7 million barrels in August 1983, as the United States was emerging from the deep 1981-82 recession and the government was still in the process of building the stockpile following the oil shocks of the 1970s. 

The releases are part of Washington's efforts to ease pressure on global energy markets after the conflict disrupted oil flows from the Gulf. Iranian attacks on regional energy infrastructure and the near closure of the Strait of Hormuz have severely curtailed exports through a waterway that in peacetime handled roughly one-fifth of the global oil and liquefied natural gas trade.

The SPR could continue to decline if the conflict drags on, with Washington relying on emergency stockpiles to cushion the impact on global oil markets and domestic fuel prices. 

US benchmark West Texas Intermediate crude has climbed from around $65 per barrel at the end of February to $90.38 as of 12:18 p.m. EDT on Thursday, after briefly topping $113 in early April ahead of the US-Iran ceasefire that was announced on April 8. 

By comparison, the SPR held a record 726.6 million barrels in December 2009, making current inventories less than half their historic peak.

Know more: The United States is not alone in tapping emergency stockpiles. In March, the International Energy Agency's 32 member countries agreed to make 400 million barrels of oil available to the market. The coordinated action marked the largest emergency release in the agency's history, surpassing the 182 million barrels released following Russia's invasion of Ukraine in 2022.