The SPR has ebbed to a new 37-year low in mid-August, dropping to 453 million barrels, enough to cover about 23 days of consumption if all other sources became unavailable, fresh Department of Energy data shows.
The figures indicate that the reserve presently contains 232.6 million barrels of sweet oil (i.e. crude with low sulfur content) and 220.5 million barrels of sour oil (i.e. high sulfur content). The latter requires additional processing to turn into petrol, meaning higher costs at the pump.
The SPR has declined steadily over the past eight months, from 5.4 and 9.4 million barrels in January and February, to 13.4 and 18.4 million barrels in March and April, to 24.1 million, 29.8 million, 25.3 million and 15 million barrels through May, June, July and August, respectively. In total, over 140 million barrels have been slashed from the emergency stockpile since January.
The last time the SPR dipped to its current showing was in January 1985, a period of a global energy glut caused by Persian Gulf oil sheikdoms’ decision to dramatically ramp up production. The reserve was created in 1975 by President Gerald Ford in the wake of an OPEC oil embargo targeting the US and other nations that supported Israel in the Yom Kippur War. Formally, the president of the United States has the right to release SPR oil only if “a severe energy interruption” which threatens the economy or US national security is deemed to have occurred.
The Biden administration signed off on the release of a million barrels of oil per day from the SPR for six months in late March, saying the measure would help get a grip on soaring gasoline prices. The policy sparked an outcry from Republicans in July after Reuters and the Washington Free Beacon reported 5+ million barrels from the reserve had been shipped abroad, nearly one million of that to a Chinese energy company which Hunter Biden invested in.
Global energy prices began to creep up in late 2021 amid a return of pre-Covid economic demand and the failure of ‘green energy’ initiatives undertaken by the US and Europe, and exploded in the spring of 2022 after Washington and Brussels tried to “punish” Russia for its military operation in Ukraine by choking off Moscow’s access to Western oil markets. Russia, which accounts for about 10 percent of global oil production, speedily reoriented supplies to China, India and other emerging markets.
Along with the release of SPR oil, the Biden administration has also sought to lobby and pressure allies into releasing crude from their own reserves after failing to convince Saudi Arabia and other OPEC members into ramping up production during Biden’s trip to the Middle East in July.
According to the American Automobile Association, the US national average gas price is sitting at $3.88 a gallon as of Wednesday, below the $5+ record hit earlier this summer, but still well above the $2.39 per gallon average it was at a year and a half ago when Biden took office, when total SPR stocks amounted to some 638 million barrels.