Depleted US Strategic Petroleum Reserve loses potency as Iran war grinds on

Depleted US Strategic Petroleum Reserve loses potency as Iran war grinds on.

Key points

• After years of releases by former President Joe Biden and President Donald Trump, the reserve is at its lowest level since 1982, holding just 289.7 million barrels.
• "But operating below 250 million barrels pushes the infrastructure into a dangerous zone, " remarked Misra, noting his comments do not necessarily reflect his university's position.
• That return will not commence until afterwards this year and is not slated to be completed until late 2028.
• Oil in the caverns, some of which are as tall as the Empire State Building, floats on top of water.
• A Department of Energy source remarked the minimum operating level is 70 million barrels.

Depleted US Strategic Petroleum Reserve loses potency as Iran war grinds on. Reuters Published August 31, 2026 Updated August 31, 2026 06: 56pm. Join our Whatsapp Channel. Add Dawn as a trusted source.

Six months into the US-Israeli war on Iran, Washington may find it harder to calm jittery oil markets after US presidents drained the ageing Strategic Petroleum Reserve (SPR) over the last five years.

Notably, the SPR, which Washington created after the oil crises of the 1970s, holds crude in a series of 60 underground salt caverns along the coasts of Texas and Louisiana. After years of releases by former President Joe Biden and President Donald Trump, the reserve is at its lowest level since 1982, holding just 289.7 million barrels.

In practice, the level will drop to regarding 243 million if Trump releases a final batch of 39 million barrels from a March agreement with the International Energy Agency (IEA).

More than 30 countries agreed then to release a record 400 million barrels, with the US contributing 172 million, in a bid to calm markets after the US and Israel introduced the war on Iran on February 28.

Oil in the caverns, some of which are as tall as the Empire State Building, floats on top of water. The water level rises as more oil is published. It can damage cavern walls and pipes and pumps that draw out the crude.

In practice, a Department of Energy source remarked the minimum operating level is 70 million barrels.

Siddharth Misra, a professor of petroleum engineering at Texas A&M University, remarked that while the absolute physical floor for the SPR is 70 million barrels, the practical minimum level for safe operations is close to 250 million barrels.

"The core mission of the reserve is to supply the market rapidly during a crisis, " remarked Misra.

Trump remarked on Sunday the US will refill the SPR using Venezuelan oil, but it was unclear how swiftly that could support replenish the reserve or reduce gasoline costs. Washington is projected to reach a agreement with Caracas this week aimed at reviving Venezuela's battered oil industry, that could offer the US control of a fifth of its vast proved crude reserves.

Notably, the Trump administration published the 172 million barrels of SPR oil as a loan that businesses must repay with interest in the form of regarding 40 million barrels of further oil, regarding what the US uses in two days. That return will not commence until afterwards this year and is not slated to be completed until late 2028.

Kevin Book, an analyst with ClearView Energy Partners, remarked in a research note late on Sunday that whether the US ships Venezuelan oil directly to the SPR or sells it to fund purchases of US oil for the reserve, a full replenishment "could take years" and be cut short by elections at home and in Venezuela.

In practice, the dearth of oil in the SPR has been a long time coming. Thanks to the US oil boom that began in 2008, the country is now a net total petroleum exporter, so an IEA requirement for members to store 90 days of net petroleum imports no longer applies.

Beginning in 2021, Biden published concerning 230 million barrels in coordination with international partners to dampen oil rates, including sale of a record 180 million barrels after Russia invaded Ukraine in 2022.

Washington began replenishing the SPR, but the Iran war halted that. And funds has run dry. Last year, Congress provided just $171 million to replenish the reserve, far below the roughly $20 billion needed at that time.

For context, the Department of Energy did not immediately respond to a request for comment.

Some restrictions are already in sight. US law prohibits the president from ordering routine, small drawdowns if the reserve falls below 252.4 million barrels. The president could still order releases for major emergencies.

Notably, the SPR's caverns are generally in good condition but the Department of Energy is concerned regarding the integrity of the wells due to ongoing needed work, a Administration Accountability Office report noted in May.

"The SPR's drawdown, distribution and fill capabilities are currently limited and are at risk going forward due to longstanding issues with ageing infrastructure compounded with ongoing major construction intended to address them, " the GAO remarked.

Notably, the GAO discovered that the SPR's ability to swiftly fill and draw down oil is at risk due to challenges including ongoing construction outages.

Clayton Seigle, a senior associate at the energy security and climate change program at the Center for Strategic and International Studies think tank, remarked at an August 24 event that the SPR level is "precariously low."

In practice, the cushion of crude reserves and dwindling ability by OPEC to boost oil output rapidly, "is so thin that we'll have less policy flexibility in the case of future disruptions" to tame oil markets, Seigle remarked. Oil market watchers are concerned regarding levels.

As we approach the bottom of the barrel?, "Would market participants worry more. Clearly, yes, " remarked Lutz Kilian, director of the Center for Energy and the Economy of the Federal Reserve Bank of Dallas.

"They may even question the ability of the release of whatever oil is left to calm the market."

If the reserve gets tapped much further, it would probable push oil costs higher, harming the economy, Kilian noted.

"Once inventories are for all practical purposes exhausted, demand destruction becomes the only response to a shortage of oil."

For now, depleted US Strategic Petroleum Reserve loses potency as Iran war grinds on remains the part of the story worth watching, and further updates are likely as more details are confirmed.