On June 15 (US time), according to CNN, oil in the US Strategic Oil Reserve (SPR) fell to its lowest level since 1983 when the administration of US President Donald Trump continued to use emergency reserves to reduce the impact of the conflict with Iran.
Federal data released on June 15 showed that the US exported an additional 8.9 million barrels of oil from SPR just last week.
This caused the remaining oil in the US emergency reserves to decrease to about 340.3 million barrels of crude oil, lower than the previous low recorded in July 2023 under President Joe Biden after the Russia-Ukraine conflict broke out.
The last time SPR had oil lower than it is now was in July 1983, when President Ronald Reagan's administration first began building this reserve and the US economy at that time was much smaller in scale than it is now.
SPR was established after the 1970s oil crisis to ensure energy security for the US in the event of serious supply disruptions.
In the context of rising energy prices due to conflicts in the Middle East, this reserve has become an important tool used by the Trump administration to limit the impact on consumers, businesses and the economy.
Mr. Andy Lipow, Chairman of Lipow Oil Associates consulting firm, said that the US's continuous oil exports from SPR, along with similar moves from some other countries and China's reduction in oil exports, have contributed to preventing oil prices from soaring to 150 USD/barrel.
However, successive conflicts have significantly reduced US oil reserves. Since the war with Iran broke out at the end of February, oil in the SPR has decreased by about 75 million barrels, equivalent to 18%.
Currently, SPR is only less than half of its designed capacity.
Mr. Mike Sommers, CEO of the American Petroleum Institute (API), warned that SPR needs to maintain a minimum of about 20% capacity to operate effectively.
According to experts, the amount of oil exported from SPR will need to be replenished in the future. However, restocking is unlikely to be completed before the peak storm season in the Gulf of Mexico.
Mr. Lipow warned that if a major storm disrupts oil production for weeks, the US may face greater risks as the reserve buffer has significantly declined.
