US strategic petroleum reserve falls to 44-year low: Why the oil stockpile is down to 283.8 million barrels

The U.S. Strategic Petroleum Reserve has fallen to its lowest level since 1982, with crude oil stocks dropping to 283.8 million barrels last week, according to U.S. Department of Energy data cited by Reuters.

The latest figure comes after months of withdrawals from the emergency stockpile. Reuters reported that the decline is part of a U.S. agreement to release 172 million barrels from the reserve.

The new low is significant because the reserve had already fallen below 300 million barrels earlier this year. The latest data show that the drawdown has continued even after the stockpile reached that multi-decade threshold.

US Strategic Petroleum Reserve hits 44-year low

OilPrice.com reported that the reserve stood at 284.6 million barrels for the week ending September 18, compared with 285 million barrels a week earlier and 406 million barrels a year earlier. The reserve then fell further to 283.8 million barrels the following week.

That comparison provides a clearer picture of the scale of the decline. The reserve is now more than 120 million barrels below its level from a year earlier, based on the figures reported by OilPrice.com.

Global Energy Flow's oil-storage data likewise places the U.S. Strategic Petroleum Reserve at roughly 40% of its 714-million-barrel capacity, based on its latest confirmed EIA reading.

Why the US oil reserve keeps falling

The latest decline is tied to the large release from the Strategic Petroleum Reserve.

OilPrice.com reported that the current drawdown traces back to a 172-million-barrel release authorized in March. It said the release was part of a coordinated 400-million-barrel release involving 32 International Energy Agency member countries.

The reserve has consequently reached new multi-decade lows more than once this year. OilPrice.com reported that it first fell below 300 million barrels and then moved below its 1983 level in early August.

What the 283.8 million-barrel level means

The latest number matters because the SPR is designed to hold crude for use during oil-supply emergencies.

With the reserve now at 283.8 million barrels, the amount of crude held in the stockpile is substantially lower than it was a year ago. OilPrice.com's figures show a decline from 406 million barrels a year earlier to 283.8 million barrels last week.

Global Energy Flow also describes the SPR as a government stockpile intended to provide a buffer during supply emergencies. Its latest confirmed data put the reserve at about 285 million barrels, or around 40% of its 714-million-barrel capacity.

The figures therefore show two things at the same time: the reserve has reached a level not seen since 1982, while the pace of the drawdown has continued after the stockpile moved below 300 million barrels.

Venezuela adds another layer to the oil reserve debate

The low level of the Strategic Petroleum Reserve has also brought attention to the U.S. administration's plans involving Venezuelan oil.

NPR reported that the Trump administration announced a partnership in August that would give the United States the right to purchase 20% of the output from current and future fields operated by the Venezuelan company involved in the agreement. The White House said the arrangement could provide a stable supply of lower-cost oil that could help facilitate the refilling of the Strategic Petroleum Reserve.

Energy Secretary Chris Wright said the plan was not simply about filling the reserve with Venezuelan crude. Instead, he discussed the possibility of exchanging U.S. barrels for Venezuelan crude as different types of crude have different characteristics, NPR reported.