The amount of oil sitting in the U.S. Strategic Petroleum Reserve (SPR) has dropped to its lowest level in more than four decades, according to federal data released Monday, as the Trump administration continues drawing emergency crude from the stockpile to cushion the economy against disruptions caused by the war with Iran.

The reserve held 340.3 million barrels as of June 12, the Department of Energy reported. That is the smallest amount since 1983, when the Reagan administration was still building the reserve and the U.S. economy was far smaller than it is today.

The new figure falls below the previous modern low of 346.7 million barrels, reached in July 2023 following market disruptions tied to Russia’s invasion of Ukraine.

The government withdrew another 8.9 million barrels during the past week alone. Since the Iran conflict began in late February, the reserve has declined by approximately 75 million barrels, or about 18%.

The drawdown traces directly to disruptions surrounding the Strait of Hormuz, one of the world’s most important oil transit routes. With global energy markets under pressure and crude prices rising, the administration relied on the emergency reserve to help stabilize fuel costs for consumers and businesses.

The Strategic Petroleum Reserve was created in 1975 following the Arab oil embargo and is intended to protect the United States against major supply disruptions. The reserve has helped limit upward pressure on gasoline and diesel prices during months of geopolitical instability.

Andy Lipow, president of Lipow Oil Associates, said the reserve releases, combined with additional supplies from allied countries and shifts in global demand, helped prevent a far sharper spike in oil prices. He warned, however, that a smaller reserve leaves the country with less flexibility if another major disruption occurs, such as a severe hurricane affecting Gulf Coast production.

At current levels, the reserve is less than half full. The SPR has a maximum capacity of approximately 714 million barrels and reached a record level of about 726.6 million barrels in 2009.

Mike Sommers, chief executive of the American Petroleum Institute, recently cautioned that maintaining adequate reserve levels remains important for national energy security and emergency response capabilities.

Relief may be on the horizon. Over the weekend, the United States and Iran announced an interim agreement aimed at reducing tensions and reopening shipping through the Strait of Hormuz. Markets responded positively, with Brent crude falling more than 4% Monday as traders anticipated improved supply flows.

If shipping through the strait normalizes, pressure on global oil supplies could ease, reducing the need for continued large-scale reserve releases. Over time, that could allow the government to begin rebuilding emergency stockpiles.

Any recovery, however, is expected to take time. Energy infrastructure, shipping schedules, and production levels across the Gulf region will require months to fully normalize after the disruption.

For now, the Strategic Petroleum Reserve continues to sit at its lowest level in more than 40 years, underscoring the significant role it has played in helping shield the U.S. economy from one of the largest energy disruptions in recent memory.

JBizNews Desk

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