US Oil Reserves Plummet to 40-Year Low Amid Strait of Hormuz Tensions

Oil analyst June Goh warns of 'violent repricing' as US oil reserves fall to a level not seen since the Reagan administration. The Strategic Petroleum Reserve has dropped to 320 million barrels after draining 66 million barrels since the Iran conflict began.

The pace of emptying is rapid, with a record 9.92 million barrels pulled in one week alone. Analysts are concerned that the reserve will soon reach a level not seen since August 1983. The buffer is dwindling as the administration has leaned on it to keep US exports moving and cap domestic gasoline prices.

Eurasia Group sees oil rising toward $95 a barrel, while TD Securities says $100 a barrel is plausible if physical shortages become obvious. Energy equities such as Exxon Mobil (XOM) and Chevron (CVX) have already surged 24% and 25% year-to-date, respectively.