The US Strategic Petroleum Reserve just hit a level not seen since Ronald Reagan was in his first term. Inventories fell by roughly 3 million barrels last week, landing at 316.5 million barrels, a number that would have seemed unthinkable a decade ago when the reserve held more than twice that amount.
What’s happening with the SPR
The Strategic Petroleum Reserve was created in response to the Arab oil embargo that left Americans waiting in gas lines. At its peak, the SPR held around 727 million barrels. At 316.5 million barrels, we’re looking at reserves that have been cut by more than half from their historical highs.
With reserves at 1983 levels, the government has fewer options during a supply crisis. In a world where geopolitical tensions can disrupt oil supply chains with little warning, a thin reserve means less room to absorb shocks without prices spiking.
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