The U.S. Strategic Petroleum Reserve could fall to around 243 million barrels, pushing it below the level considered optimal for efficient operation.
Heavy SPR releases have helped contain oil prices during the Iran war, but dwindling U.S. and Chinese inventories are reducing the market’s emergency supply cushion.
Crude oil prices are on their way up again, driven by the latest flare-up of hostilities in the Persian Gulf—but they are also up because U.S. crude inventories are down again.
The U.S. is set to release another 39 million barrels from the Strategic Petroleum Reserve under the joint OECD plan, which would bring down the level of crude in the reserve to 243 million barrels.
This will be dangerous: the generally accepted operational minimum for oil in the SPR is between 250 and 300 million barrels.
If the strategic petroleum reserve of the world’s largest oil consumer is nearing critical levels, that would be one less stabilizing factor for oil prices.
