The U.S. Strategic Petroleum Reserve has dropped to its lowest level since 1982. According to the Energy Information Administration's weekly report, as of the week ending September 25, the reserve held 283.8 million barrels of crude oil, a decrease of 800,000 barrels from the previous week, and lower than any week since October 22.

The reading for the previous week, ending September 18, was 284.6 million barrels, with Reuters later confirming the drop to 283.8 million barrels based on data from the Department of Energy. The authorized storage capacity is 714 million barrels, with a current fill rate of 39.7%. The historical peak was 726.6 million barrels in early January 2010, now about 39% of that peak. A year ago, the inventory was approximately 406 million barrels.

This decline corresponds to the release of 172 million barrels authorized by the president in March, planned to be completed in about 120 days, as part of a coordinated release of 400 million barrels among 32 International Energy Agency member countries. The release began about a week later. Around February 28, military actions between the U.S., Israel, and Iran disrupted the passage of most tankers through the Strait of Hormuz, which typically handles about one-fifth of seaborne crude oil.

The inventory path has already covered more than half. The week ending February 27 had 415.4 million barrels, which decreased by 131.7 million barrels by the week ending September 25. The net reduction for the year is about 125 million barrels, lower than the full 180 million barrels released by the U.S. after the 2022 Russia-Ukraine conflict. About 133 million barrels were swapped with Shell, Vitol, and Trafigura, with contracts requiring the return of 1.25 barrels for every borrowed barrel, with delivery scheduled for early next year. The administration had promised to replenish about 200 million barrels within a year without increasing taxpayer costs.

The reserves exist in salt caverns in Texas and Louisiana, not in proven underground reserves or commercial inventories held by refineries. Commercial crude oil inventories are separately counted at about 427.3 million barrels, with approximately 24.3 million barrels at the Cushing delivery point. The statutory operational minimum is 252.4 million barrels, and the commonly used pumpable range is about 250 million to 300 million barrels, with current inventories testing this range. The backlog of salt cavern maintenance recorded by the Government Accountability Office has turned into a question of whether continued rapid extraction will damage the cavern structure.

The buyers are refineries and traders under the government's emergency release, while the sellers are the Department of Energy's inventory. The event-driven release comes from the coordinated release after the strait disruption, not from shale production increases. Physical oil flows from public salt caverns to refineries and traders' tankers, while paper prices are still determined by the navigation through Hormuz and the replenishment pace. Beneficiaries include Shell, Vitol, and Trafigura, who received replacement crude, as well as refineries processing at costs lower than alternative imports. The remaining emergency days are under pressure: based on a four-week average of imports, coverage has dropped from about 63 days to about 45 days.

For the week ending September 25, West Texas Intermediate crude was about $93.57, and Brent was about $117.08. The next Energy Information Administration weekly report is scheduled for October 7. Replenishment will have to wait until the replacement barrels are returned early next year, and the speed of extraction from the salt caverns is limited by maintenance and cavern pressure, meaning inventory numbers will not return to above 400 million barrels in sync with announcements.

Source: Public Information