America is digging deeper into its emergency oil reserves as the fallout from the war with Iran continues to squeeze global energy supplies. Since the conflict began, the US Strategic Petroleum Reserve has lost about 50 million barrels, as the Trump administration seeks to offset supply shortages and ease pressure from rising fuel prices. These withdrawals are dragging down the country's emergency oil stockpile levels towards the lowest levels since 1980s.
These releases also mark a sharp contrast with Trump's criticism of former President Joe Biden's use of the Strategic Petroleum Reserve (SPR). While launching his presidential campaign at Mar-a-Lago, Trump accused Biden of using emergency oil supplies to keep fuel prices lower ahead of elections, saying, “The strategic national reserves, which I filled up, have been virtually drained in order to keep gasoline prices lower, just prior to the election.”
Now, with motorists struggling with rising fuel costs and political pressure building ahead of the midterms, the US is releasing oil from the SPR at a pace that has eclipsed previous records.
The Middle East conflict began on February 28 after the US and Israel launched joint strikes on Iran. After the attacks, Tehran tightened its noose on the crucial Strait of Hormuz, squeezing more than 1.2 billion barrels of crude supplies, according to S&P Global Energy.
Disruption in the world’s oil pipeline has left countries across Europe and Asia crumbling to alternative supplies, with US crude emerging as a major replacement source.
US’s emergency oil vault
The emergency reserve, stored in underground salt caverns across Texas and Louisiana, was created to provide a buffer during major disruptions to energy supplies, CNN reported.
Federal data shows that 9.1 million barrels were released from the SPR last week alone, only slightly below the all-time weekly record set a week earlier. Since the conflict with Iran began, the reserve has shrunk by around 50 million barrels, leaving 365 million barrels in storage, according to the US Energy Information Administration.
That level is approaching the lowest seen in decades and comes after years of significant withdrawals. Following Russia's invasion of Ukraine in 2022, the Biden administration also turned to the reserve, contributing to a decline from roughly 638 million barrels in early 2021 to 347 million barrels by mid-2023.
The current releases are not solely serving domestic demand. According to estimates from Kpler, around half of the crude released during April and May was exported overseas.
Worryingly low levels
Accordingly to analysts, depletion of emergency reserves carries longer-term consequences because every barrel withdrawn today will eventually have to be replaced.
“The US is basically the supplier of last resort. The rest of the world needs that crude,” said Matt Smith, lead oil analyst at Kpler. “This isn’t like a cookie jar. Those barrels have got to be put back at some point and that will lead to higher prices,” the expert further told CNN.
Concerns are not limited to emergency reserves. Commercial stockpiles are also declining, particularly at Cushing, Oklahoma, the key storage hub linked to West Texas Intermediate crude pricing.
Kpler estimates that inventories at Cushing have fallen from about 33 million barrels seven weeks ago to around 24.5 million barrels. According to Smith, levels near 20 million barrels are considered “operationally low levels”.
“You can’t draw them down to zero because there is gunk at the bottom of the tanks. You need a certain volume to keep them operational,” he said.
The rapid decline in US inventories has also fuelled discussion about whether Washington could curb crude exports to preserve domestic supplies. Analysts say such measures could help ease fuel prices at home but may create wider disruption across global energy markets.
The White House has indicated that export restrictions are not under consideration.
Instead, Smith believes market conditions could naturally slow overseas shipments as shrinking inventories reduce the price advantage of US crude.
“But when the music stops and the US is no longer supplying barrels to the market,” Smith said, “where will other countries go for crude?”
The conflict, which began in late February, has continued to escalate despite ongoing negotiations between the two sides. Disruptions in the Strait of Hormuz, a key route that handles around 20% of the world's energy supplies, have left countries scrambling to secure fuel. The supply shock has also pushed crude oil prices from around $70 a barrel to above $100 a barrel.
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