The US Strategic Petroleum Reserve (SPR), established after the oil crises of the 1970s, stores crude oil in 60 underground salt caverns along the coasts of Texas and Louisiana.
Following years of releases under former president Joe Biden and President Donald Trump, the reserve has fallen to its lowest level since 1982, with stocks currently standing at around 289.7 million barrels.
The stockpile could fall further to roughly 243 million barrels if Trump authorises the release of a final 39 million barrels under an agreement reached with the International Energy Agency (IEA) in March.
More than 30 countries agreed at the time to release a record 400 million barrels of oil, including 172 million barrels from the United States, in an effort to stabilise global markets after the US and Israel launched their war on Iran on February 28.
The SPR’s crude is stored in underground caverns, some of which are as tall as the Empire State Building, where oil floats above a layer of water. As more crude is withdrawn, the rising water level can place additional pressure on cavern walls as well as the wells, pipes and pumps used to extract the oil.
A US Department of Energy source said the reserve’s minimum operating level is 70 million barrels.
However, Siddharth Misra, a petroleum engineering professor at Texas A&M University, said the practical minimum for safe SPR operations is closer to 250 million barrels.
“While 70 million barrels is the physical floor, the reserve’s core mission is to supply the market rapidly during a crisis,” Misra said, warning that operating below 250 million barrels could put the infrastructure in a “dangerous zone”.
Trump said on Sunday that the US would replenish the SPR with Venezuelan oil, although it remains unclear how quickly the move could rebuild the reserve or bring down petrol prices.
Washington is expected to reach a deal with Caracas this week aimed at reviving Venezuela’s struggling oil industry. The agreement could potentially give the United States control over about a fifth of Venezuela’s proven crude oil reserves.
The Trump administration released 172 million barrels from the SPR as a loan that oil companies are required to repay with interest, including around 40 million barrels of additional crude — equivalent to roughly two days of US consumption.
The repayment process is expected to begin later this year and is not scheduled to be completed until late 2028.
Kevin Book, an analyst at ClearView Energy Partners, said replenishing the reserve could take years, whether Washington receives Venezuelan crude directly or sells it to finance purchases of US oil.
He also warned that the replenishment programme could be disrupted by elections in the United States and Venezuela.
The SPR’s depleted state is the result of years of declining inventories.
The US became a net exporter of petroleum products following the shale oil boom that began in 2008, meaning it is no longer subject to the International Energy Agency’s requirement for member countries to maintain stocks equivalent to 90 days of net petroleum imports.
Starting in 2021, Biden released around 230 million barrels from the SPR in coordination with international partners to help contain oil prices. This included a record release of 180 million barrels following Russia’s invasion of Ukraine in 2022.
Although Washington later began replenishing the reserve, those efforts were halted by the Iran war. Funding has also emerged as a major obstacle. Congress allocated only $171 million last year to rebuild the SPR, far below the roughly $20 billion estimated to be required at the time.
US law also restricts the president from ordering routine, small-scale releases once SPR inventories fall below 252.4 million barrels, although emergency drawdowns remain permitted.
A Government Accountability Office (GAO) report in May said the reserve’s underground caverns were generally in good condition but raised concerns about the integrity of wells and the impact of ageing infrastructure.
The GAO warned that the SPR’s ability to rapidly withdraw, distribute and replenish crude is already limited and could deteriorate further because of longstanding infrastructure problems and ongoing construction work.
Energy analysts have also expressed concern over the reserve’s shrinking capacity to respond to future disruptions.
Clayton Seigle, a senior associate with the Center for Strategic and International Studies’ energy security and climate change programme, described the SPR’s current level as “precariously low” at an August 24 event.
He said the combination of declining crude reserves and OPEC’s reduced ability to quickly increase production has left the global oil market with a much smaller buffer.
“This is so thin that we’ll have less policy flexibility in the case of future disruptions,” Seigle said.
Oil market analysts are also questioning whether further SPR releases would be enough to calm prices.
“Would market participants worry more, as we approach the bottom of the barrel? Clearly, yes,” said Lutz Kilian, director of the Center for Energy and the Economy at the Federal Reserve Bank of Dallas.
He said traders could begin to doubt whether the remaining SPR stocks would be sufficient to stabilise the market during another major disruption.
Further depletion of the reserve could push oil prices higher and put additional pressure on the US economy, Kilian warned.
“Once inventories are for all practical purposes exhausted, demand destruction becomes the only response to a shortage of oil,” he said.
