US energy dept to release extra 40M barrels of crude, pushing reserves to historic low
The upcoming release will push the SPR past its lowest operational threshold amid soaring fuel prices and a growing diesel shortage
The US Department of Energy announced on 29 September that it will offer another 40 million barrels of crude from the Strategic Petroleum Reserve (SPR) as a “loan” to energy companies amid an ongoing fuel crisis caused by the war on Iran.
“With today’s actions, the United States continues to lead the coordinated efforts to stabilize oil markets for the benefit of Americans and people around the world,” US Secretary of Energy Chris Wright said in a statement.
The upcoming release is the final tranche of the 172 million barrels Washington pledged earlier this year as part of an emergency release coordinated by the International Energy Agency (IEA).
The US SPR fell to 286.6 million barrels at the end of August, its lowest level since 1982 and 445 million barrels below maximum capacity.
Releasing the full 40 million barrels would push the SPR below the 252.4-million-barrel threshold, the operational minimum established under US federal law.
According to US federal law, non-emergency drawdowns are restricted once SPR inventories fall below 252.4 million barrels.
A 1981 Government Accountability Office report advised releasing less than 250 million barrels only during a “very severe emergency.”
“While the United States and Japan are delivering on their commitments, several European member countries have released only a fraction of the crude oil and petroleum products they pledged. We urge every member country to fulfill its commitments. Thanks to President Trump, these exchanges will also ensure America’s Strategic Petroleum Reserve continues to be refilled, while saving taxpayers more than $3 billion,” Wright added in his statement.
Energy companies must submit bids for the upcoming SPR release by 6 October.
Since the start of Washington's war of aggression against Iran, gas prices in the US have spiked by almost 50 percent to an average of $4 per gallon, while diesel has climbed 70 percent to over $6 per gallon.
By early September, distillate inventories stood 14 percent below the five-year average, while gasoline inventories were 6 percent below typical seasonal levels.
The SPR has been trending lower since Russia's 2022 invasion of Ukraine, followed by repeated OPEC+ refusals to increase production during former president Joe Biden’s term in office.