Home Energy Crude Oil By Irina Slav - Sep 02, 2026, 6:00 PM CDT 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.
Refilling the SPR with Venezuelan crude could prove difficult, as Venezuela’s heavy oil may not be suitable for infrastructure designed primarily for lighter crude. 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, and the Strategic Petroleum Reserve is moving closer to critical levels. The importance of oil inventories came to the fore soon after the United States and Israel launched their war against Iran at the end of February.
It was thanks to these inventories that the world avoided a sharp and painful spike in oil prices. The OECD agreed a controlled release of 400 million barrels, and China slashed its oil imports, leaning into its reserve. The U.S.
Strategic Petroleum Reserve has been essential for the OECD release. Its part in the joint release stood at 172 million barrels. Oil production in the United States has responded to the supply squeeze, but neither as fast or as significantly as some may have hoped as the industry retains its cautious attitude to growth.
So, the U.S. federal government has been selling oil from the Strategic Petroleum Reserve. A lot of this oil has gone to Europe , which has struggled to secure its oil supply amid its own sanctions on Russian energy and the war in the Middle East. Yet the latest release of oil from the SPR has come on top of earlier releases, under the Biden administration, that already reduced the level of available oil in the reserve significantly—and that was never fully replenished, leading to a much lower starting point for this year’s release.
The United States is set to release another 39 million barrels from the Strategic Petroleum Reserve under the joint OECD plan. This would bring down the level of crude in the reserve to 243 million barrels, Reuters reported earlier this week. This will be dangerous: the generally accepted operational minimum for oil in the SPR is between 250 and 300 million barrels, below which the reserve may find it difficult to pump and process oil efficiently.
Some industry observers were voicing concern about the level of crude in the SPR even before the Trump administration came into office. Their argument was that the Biden releases have brought the SPR down to uncomfortably low levels and it needed fast replenishment. That replenishment never came, however, although some crude purchases have been made since the massive release in 2022.
And then the new war began, squeezing supply much worse than last time. The reason for worry about the SPR is purely physical. As explained by Reuters, the oil in the strategic reserve is stored in salt caverns and floats on a layer of water.
The more oil is drawn from the caverns, the higher the water level rises, and with it the risk of damage to the walls of the caverns and the pipes and pumps used to suck the crude out. The absolute minimum required for the existence of the reserve is 70 million barrels, according to a petroleum engineering professor from A&M University, but this is irrelevant because the critical level is around 250 million barrels. Below that, the reserve becomes difficult to draw from.
“The core mission of the reserve is to supply the market rapidly during a crisis,” Professor Siddharth Misra told Reuters. “But operating below 250 million barrels pushes the infrastructure into a dangerous zone.” 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. A shrunken SPR means less available supply in storage to mitigate any future—or continued—supply squeezes.
This, in turn, will enhance oil price volatility as China’s oil inventories remain the one substantial supply cushion in case of a new outage. Yet China’s inventories are also not where they were at the start of the year, at over 1 billion barrels. Drawn down inventories make markets nervous.
The U.S. president said this weekend that his administration would refill the SPR with Venezuelan crude, but whether that would be physically possible is unclear. Venezuelan crude is heavy while the crude that can be stored in the Strategic Petroleum Reserve needs to be much lighter because that was the kind of crude the reserve was designed for. One cannot simply swap light for heavy crude with no consequences for the infrastructure.
One analyst suggested that Trump could sell Venezuelan heavy to buy lighter crude for the SPR—but that would take years, according to ClearView Energy Partners’ Kevin Book, as quoted by Reuters. There is also the little detail about the immediate availability of that Venezuelan oil and whether Trump really plans to just take it as a “Gift from Venezuela to the People of the United States” without payment, or whether the U.S. would pay for it. Currently, Venezuela is producing oil at a rate of 1.25 million barrels daily.
While the SPR depletion problem gets resolved, we could reasonably expect higher oil prices, especially if the fighting in the Persian Gulf continues. By Irina Slav for Oilprice.com More Top Reads From Oilprice.com Russia Doubles Dark Fleet to Ship LNG to Asia U.S. Energy Storage Capacity Installations Hit Record High in Q2 The Suspicious Timing Behind Trump's “Biggest Oil Deal In History” Download The Free Oilprice App Today Back to homepage Irina Slav What I Cover Irina Slav has been writing about global energy markets since 2007, covering the oil and gas industry, energy security, commodities, and the...
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