US Oil Reserve Hits 44-Year Low Amid Global Energy Shortage and Iran War

The US Strategic Petroleum Reserve has reached its lowest level since 1982, according to data from the Department of Energy. The reserve dropped by over 3 million barrels in the week ending August 28, leaving it at 286.6 million barrels or about 40% of overall capacity.

This drawdown is a result of the ongoing global energy shortage, which has pushed oil prices above $4 per gallon in the US and contributed to rekindled inflation ahead of November's midterm elections.

The Strategic Petroleum Reserve was established after the Arab Oil Embargo triggered an energy crisis in the early 1970s. It provides an emergency source of oil intended to protect the US against sudden supply crunches, with a maximum capacity of 714 million barrels stored in large underground salt caverns along the gulf coastlines of Louisiana and Texas.

The president retains discretion to release oil from the reserve when statutory conditions are met. In such cases, the US sells the oil on the open market, which should theoretically bring down oil prices by increasing supply.