At the start of the 2022 campaign, U.S. President Donald Trump criticized the predecessor for rushing the emergency oil reserves (SPR) before the mid-term election.

"The National Reserve oil I filled has been nearly drained to lower the gas prices, right in front of the election shelf", Trump said during the campaign at Mar-a-Lago, referring to the record oil spill by former President Joe Biden at the time.

However, as Americans are increasingly dissatisfied with increased gas prices, Trump's administration is also running out of strategic oil, at a rate faster than the predecessor and right before the mid-term election. In addition to not only noting the scale of the oil spills above earlier records, the amount of oil left in the reserves is also on the lowest level since the early 80s of the 20th century. At the time, the American economy was much smaller and consumed less energy than it is today.

The emergency measures launched earlier this year show the magnitude of the oil crisis caused by the Middle East War, as well as the global race to replace the amount of crude oil trapped in the Persian Gulf, the decline of emergency reserves would also mean that the U.S. officials would have to redistribute the later SPR. This is a process that can sustain demand and oil prices at high levels.

"That oil would have to be bought back at some point, making prices higher", Matt Smith, chief of oil analysis at the Kpler Energy Data Company, said.

  • Mahé reserves American strategic oil at Freeport, Texas April/2020. Image: Reuters*

Of course, moments like the present are exactly why SPR was created. As the world's largest emergency oil reserves, SPR was used by American presidents during wartime, natural disasters, and many other accidents to interrupt other supplies.

Mr. Biden did a strong drain of oil from SPR after the Russian conflict of 2022, causing gas prices in the US to exceed $5 per gallon (1,32 per liter) for the first time in history. According to federal data, the amount of oil in SPR has declined from about 638 million barrels of January 1/2021 to the lowest 40 years of 347 million barrels in July 2023.

S&P Global Energy states that the paralysis of the Hormuz Channel since the end of February interrupted the flow of more than 1.2 billion barrels of global crude oil. In order to compensate for this shortage, SPR released 9.1 million barrels of crude oil just last week. This figure was only a little lower than the record record level the previous week.

According to the U.S. Energy Information Agency (EIA), since the outbreak of the Middle East War, the amount of oil in SPR has been reduced by about 50 million barrels, which equal 12%, down to 365 million barrels. This is the lowest since April 2024. However, this oil does not serve only American refineries. According to Kpler, about half of the oil was drained in April and May was exported.

"U.S. is basically the last provider. The rest of the world needs that oil," Smith said.

The countries in Asia and Europe suffered a major impact from the closure of the Hormuz Channel, causing them to seek the American crude oil. This trend is likely to continue if the crisis persists.

"Even if we reach a peace agreement tomorrow, the Channel will also take six weeks to run out of obstruction. This will continue to put pressure on storage as summer's demand peaks", Helima Croft, director of global freight strategy at RBC Capital Markets, said on CNN.

Not only is the government's reserves of oil, the oil reserves of American businesses are also falling fast. Kpler's data indicates that the storage at Cushing's dropped from about 33 million barrels 7 weeks ago to about 270,000 barrels. This number is approaching the level of "lowly operating" - about 20 million barrels.

Croft claimed that the world was "fast to the bottom of the tanks", but the market's response remained somewhat light due to the U.S. and Iran's expectations about to reach an agreement.

US oil exports have increased dramatically, along with the rapid decline of both emergency reserves and trades can cause American officials to consider the strongest measures. It's restricted or even banned oil exports.

This could temporarily help lower the gas prices in the US. However, the analysts who warned the alarm were at risk of causing the global power system to become more unstable, causing serious damage to the oil refineries and the American oil mining company, the White House also asserts that this measure has not yet been considered.

Smith argues that instead of limited export measures, it is the market elements that will cause the American oil export to halt. The reduced storage will narrow the price between WTI and Brent, making American oil less attractive to foreign buyers. The WTI and Brent oil fell together this morning over 1%, showing the turn of 87 dollars and 92 dollars a barrel.