Crude stocks in the U.S. Strategic Petroleum Reserve stood at 284.6 million barrels for the week ending September 18, according to the Energy Information Administration, down from 285.0 million the week before and 406.0 million a year earlier. Department of Energy data show the reserve fell further the following week, to 283.8 million barrels, the lowest level since October 1982.
The reserve has now set a new multi-decade low twice this year, first falling below 300 million barrels, and below its 1983 level, in early August.
The current drawdown traces back to a 172 million-barrel release President Trump authorized in March, part of a coordinated 400 million-barrel release by 32 IEA member countries. Discharge began about a week later and was expected to take roughly 120 days, with the administration pledging to refill about 200 million barrels within a year at no cost to taxpayers.
Two different floors govern how far the reserve can fall. Federal law sets an operational minimum of 252.4 million barrels, while the generally accepted operational minimum is 250 to 300 million barrels on hand to pump and process oil efficiently, a level it is now testing.
Ben Cahill, an energy analyst at the Atlantic Council, has warned the releases carry diminishing returns: "at a certain point it becomes a self-defeating move, because releasing more oil into the market is overwhelmed by the perception that we're running out of options."
The decline lines up with what MST Marquee's Saul Kavonic called "living on an oil market credit card" earlier this month: Hormuz flows are still running at about a third of pre-war levels, and stock draws, not new supply, have kept Brent under $110 through most of the crisis.
About 133 million barrels of the drawdown are structured as swaps with Shell, Vitol and Trafigura, who are contracted to return 1.25 barrels for every one they took, with deliveries scheduled to begin early next year.
By Charles Kennedy for Oilprice.com