The US Strategic Petroleum Reserve has fallen to its lowest level in nearly four decades, bringing energy security buffer capacity back into the spotlight. Latest data shows that for the week ending June 12, US SPR inventory decreased by 8.9 million barrels to 340.3 million barrels. This level is not only lower than the lows seen during the 2023 Russia-Ukraine conflict but also marks the lowest record since July 1983. At the initial establishment of the US SPR system, inventory stood at approximately 339.9 million barrels. Currently, the authorized total capacity is about 714 million barrels, with existing inventory now less than half of the total capacity.
The significant decline in inventory mainly stems from a large-scale release plan launched in March. To mitigate energy supply shocks caused by the Hormuz Strait crisis, the US decided to join a global joint action to release petroleum reserves, planning to release a cumulative 172 million barrels. When the plan was announced, reserves were about 415 million barrels; based on current inventory, only about one-third of the entire release plan has been completed. If fully executed, the reserve scale will decrease by over 40%. Although there were previous hints that the release might terminate early if the US-Iran war ended, following the 60-day peace agreement reached by both parties over the weekend, the market is watching to see if the government will adjust the original plan. To date, no official change has been announced.
The peace agreement framework confirmed on Sunday includes the Hormuz Strait remaining open without tolls for the next 60 days and the resumption of normal energy transportation. However, energy market analysts warn that even with the agreement, global energy supply recovery will take time. Since some areas of the strait were mined during the war, mine clearance operations are still underway, and hundreds of oil tankers remain waiting for normal navigation to resume. The market generally believes that reopening the strait will help alleviate supply pressure, but oil prices returning to pre-war levels may still take several months.
From a historical perspective, the current administration's release scale is lower than that of the previous administration. When the previous administration took office in 2021, reserves were about 638 million barrels, dropping to about 394 million barrels by the end of their term in 2025, during which over 180 million barrels were released to curb energy price hikes. Therefore, despite the current continuous release, in absolute terms, the inventory decline under the previous administration was larger.
As inventory falls to a 40-year low, US energy security issues have sparked discussion. The SPR has long been viewed as a critical tool for coping with war, natural disasters, and major supply interruptions. With inventory now remaining at less than half of total capacity, it means buffer capacity against potential future energy shocks has significantly decreased. The current administration previously stated it would replenish inventory as soon as possible after the war ends, but there are still questions in the market regarding the speed of replenishment. Analysts point out that against the background of low inventory, future replenishment demand could provide new support for the global crude oil market; if oil prices rise again, replenishment costs will also increase significantly. For investors, the progress of Hormuz Strait recovery, the execution of the agreement, and subsequent replenishment plans will all directly affect global oil prices and the long-term trajectory of the energy market.
