- The US's strategic petroleum reserves have dropped to their lowest level since 1985.
- Stockpiles have fallen to 453 million barrels after President Joe Biden ordered a record release to ease gas prices.
The US's strategic oil reserves fell to their lowest level in 37 years last week as the releases ordered by President Joe Biden continued.
Strategic petroleum reserve (SPR) stockpiles fell to 453.1 million barrels in the week to Friday, according to Department of Energy data. That's the lowest level since January 1985.
Stockpiles have fallen by more than 160 million barrels this year after the White House ordered the release of record amounts of crude oil in an effort to cool sky-high gasoline prices and tamp down on inflation.
Biden said in March that the US would release 1 million barrels of oil a day for six months as energy prices spiked in the wake of Russia's invasion of Ukraine — which adds up to about 180 million barrels. The White House then said in late July the US would release another 20 million barrels.
Meanwhile, the US has pushed for other countries to release oil from their strategic reserves in an effort to boost supply and cool the pressure in the market. In March, the International Energy Agency said non-US member countries would open up an additional 60 million barrels.
Analysts have said the releases have contributed to the sharp fall in oil prices seen over the last two months, although the key driver has been fears about a global economic slowdown.
Brent crude oil has lost around 20% from its June highs, while WTI crude, the US benchmark price, has dropped around 24%.
That decline has brought US gasoline prices down from above $5 a gallon in June to $3.89 on Tuesday, according to AAA.
"The combined international agreements will result in an estimated 260 million barrels of supply released to the global market by October," Thomas Feltmate, senior economist at TD Economics, said in a note earlier this month. "Its impact on prices can't be understated."
The US strategic petroleum reserve is kept in huge underground salt caverns at four major facilities in Texas and Louisiana. When the US releases oil from the reserves, the Department of Energy sells the crude in an auction to the highest bidder.
At its peak in 2009, the SPR held 727 million barrels of crude oil. The US consumed about 20 million barrels of oil a day on average in 2021, according to the Energy Information Agency, while it produced around 11 million barrels a day.
The Biden administration is proposing to refill the stockpiles under a plan that is likely to see it order 60 million barrels this fall, for delivery at an unspecified time in the future.