Key facts
- The U.S. Department of Energy will offer 40 million barrels of crude oil from the Strategic Petroleum Reserve.
- This release is the final tranche of the 172 million barrels the U.S. pledged to a coordinated International Energy Agency emergency release.
- The reserve ended August with 286.6 million barrels after 3.1 million barrels left during the week ending Aug. 28.
- Commercial crude stocks had fallen by more than 48 million barrels over the previous 20 weeks by Sept. 1.
- Federal law restricts non-emergency drawdowns once SPR inventories fall below 252.4 million barrels.
- The reserve is expected to fall to its lowest level since 1982 once the latest release is completed.
The U.S. Department of Energy will offer another 40 million barrels of crude oil from the Strategic Petroleum Reserve, completing a pledged release of 172 million barrels. This action is part of a coordinated effort by International Energy Agency members to address elevated fuel prices and supply concerns, particularly amid the ongoing Iran war.
The latest offering is structured as an exchange, requiring companies to return larger volumes of oil later. This strategy aims to inject crude into the near-term market while ensuring future replenishment of the reserve. Bids for the exchange are due October 6.
With this release, the SPR is expected to fall to its lowest level since 1982. Commercial inventories have also seen significant drawdowns, with crude stocks falling by over 48 million barrels in the 20 weeks prior to September 1. Distillate inventories were 14% below the five-year average, and gasoline inventories were 6% below normal seasonal levels at the start of September.
Energy Secretary Chris Wright also urged European nations to fulfill their own emergency stock commitments, noting that several IEA members had released only a fraction of their pledges. The U.S. government has stated that the exchange program will ultimately return roughly 200 million barrels to the reserve.