Stocks of crude oil in the U.S. Strategic Petroleum Reserve fell to 331.2 million barrels last week, the lowest level since June 1983, according to data from the Department of Energy, as supplies continued to tighten in the fallout of the U.S.-Iran war.
Inventories in the government’s emergency stash fell by 9.05 million barrels, the third steepest draw on record. The drawdowns are a part of a U.S. agreement to release 172 million barrels from the facility to help push down fuel prices.
U.S. crude stocks have rapidly declined in recent weeks due to strong export and refining demand for American oil. Since the war began at the end of February, overall U.S. inventories, including commercial and SPR stocks, have fallen by 96.2 million barrels to 758.5 million barrels, the lowest since 1985. Inventories at Cushing, the main storage hub for oil in Oklahoma and the pricing point for U.S. West Texas Intermediate crude futures, have eased to around 20 million barrels, a level considered to be an operational low for the tank storage farm.
Under the latest SPR loans, companies borrowing the oil are required to return the original volumes, with a premium in the form of extra oil. The department says that system will help stabilize markets at no cost to U.S. taxpayers.
(Reporting by Arathy Somasekhar in Houston; Editing by David Gregorio)