Viral Oil Shortage Claim Exposed as Misleading
Claims have been circulating on social media that America has only about two weeks of oil left. However, this calculation is misleading and misunderstands how the U.S. petroleum system works.
The Strategic Petroleum Reserve (SPR) was created after the 1973-74 Arab oil embargo to reduce the impact of severe petroleum supply disruptions. The reserve holds crude oil in underground salt caverns along the Gulf Coast near major refineries, pipelines, and ports.
Currently, the SPR is at its lowest level since November 1982, with 286.6 million barrels as of August 28. This is significantly lower than its design capacity of 714 million barrels or its end-of-2020 level of 638 million barrels.
The latest Weekly Petroleum Status Report shows that the U.S. is producing about 13.9 million barrels per day of crude oil, commercial crude inventories stand at roughly 424.5 million barrels, and refineries are processing about 17.5 million barrels per day. Large volumes of crude continue to move into and out of the country every day.
The SPR release this year is structured as an exchange: companies receive SPR crude now and must return similar-quality crude later, along with additional barrels as a premium. This arrangement can eventually rebuild the reserve, but it cannot respond to another emergency today.