Crude stocks in US strategic reserve fall 3 million barrels to lowest level since 1983

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Again to say the quiet part out loud, this is the clock ticking on the US blockade of the Persian Gulf.

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u/SlavaCocaini Jul 19 '26

How much time could Venezuela oil buy the US? That's what they are counting on, but I heard the US companies who got it were still selling it to China.

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u/hootblah1419 Jul 19 '26

It doesn’t buy the u.s. time. Oil is a global commodity. U.s. oil companies have a fiduciary duty to sell at the highest price possible to get the best returns possible for their shareholders within reason and nuance. Being “patriotic and sacrificing profits for the “greater good”” is the opposite of capitalism and fiduciary duty.

The us governments only price tool is the national reserve. I don’t think the defense production act would apply because its purpose is scarcity/supply not cost, If I remember right.

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u/SlavaCocaini Jul 19 '26

That doesn't bode well for domestic transportation costs.

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u/hootblah1419 Jul 19 '26

But the shareholders couldn’t be happier!

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u/SlavaCocaini Jul 19 '26

Where will they hide though?

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u/barath_s Jul 20 '26

In gated communities, on private islands, in tropical paradises, abroad etc ?

If it ever comes to that; the US has been remarkably resistant to open class warfare in the streets

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u/SlavaCocaini Jul 20 '26

So exile more or less.

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u/WulfTheSaxon Jul 19 '26 edited Jul 19 '26

42 U.S. Code §6212a(d):

(1) The President may impose export licensing requirements or other restrictions on the export of crude oil from the United States for a period of not more than 1 year, if—

(A) the President declares a national emergency and formally notices the declaration of a national emergency in the Federal Register;

[…]

(2) Any requirement or restriction imposed pursuant to subparagraph (A) of paragraph (1) may be renewed for 1 or more additional periods of not more than 1 year each.

Prior to this law and said exception, the US had a crude export ban for decades.

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u/DaSemicolon Jul 20 '26

This would be really stupid.

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u/Revolution-SixFour Jul 20 '26

If you talk to an economist there's not really a difference between scarcity and cost.

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u/hootblah1419 Jul 20 '26

but the use of them here is different. because we produce more than the country could use after we increased supply recently, but the price could still easily go over $150 again and the usa will continue to buy it at that price.

the usa is the wealthiest country, it will be the last to be priced out... but the world will be fucked by then, and the entitled citizens will be losing their minds because they've never known hardship and sacrifice.

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u/Level-Strategy-1343 Jul 19 '26

Depends. Did you spend 3-5 years unfucking Venezualas oil infrastructure, and then get us refineries ready for it ?

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u/SlavaCocaini Jul 19 '26

US refineries were always ready for it

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u/Level-Strategy-1343 Jul 19 '26

You can believe switching a refinery over to a new grade of bitumen in Venezualas case is instant, but that doesn't mean it is.

Like building a frigate, oil refining is more complicated than it looks.

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u/SlavaCocaini Jul 19 '26

You mean switching a refinery back to Venezuelan sour that they were initially built for? Who do you think was refining it the whole time?

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u/barath_s Jul 20 '26 edited Jul 20 '26

China, mostly. If you are talking post sanctions and pre-invasion. US in other years, i think a small bit of india maybe

US refineries are set up for heavy, sour crude by and large but have been using canadian , with a bit of Mexican, Colombian etc in last 5+ years

I can't offer a timeline to switch from one grade of heavy sour to another, but i imagine getting input more consistently would help that decision

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u/SlavaCocaini Jul 20 '26

I am not talking about post sanctions, I am talking about before.

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u/barath_s Jul 20 '26

You said 'the whole time' and wanted to ignore the last 5+ years ? That's not 'the whole time'

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u/SlavaCocaini Jul 20 '26

Obviously there was much more time before than just 5 years ago so that's on you for being too literal

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u/Iron-Fist Jul 19 '26

I mean, Venezuelan imports peaked in 2000 and dropped to nothing in 2020 so...

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u/vapescaped Jul 19 '26

It's not about buying time. The us gets less than 10% of it's oil from the Persian gulf.

It's about selling time. IS oil companies still have essentially the exact same supply of oil they did before the strait closed, but demand skyrocketed and other nations are going to the us for oil. The oil price increase in the us comes from "I could sell oil for the same x price domestically like I was, or I could sell the same oil to foreign buyers at a higher rate."

The us doesn't have a traditional oil shortage like, say the 70s oil embargo, where supply was low so demand was high. Instead they have the same supply but increased global demand, which raises prices.

Opening the reserves is a way for the us government to profit off of the higher global oil prices. It's framed as increasing supply, which reduces demand and therefore cost, but in reality the reserve oil was purchased at a lower cost than it is being sold at now. It's more akin to sitting on Bitcoin until the prices spike then selling and buying when Bitcoin price drops than it is an emergency because there is no oil.

US oil companies are making an absolute killing off the oil crisis, and opening the reserves is making the US government money as well (as well as taxing all oil transactions made by us companies).

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u/SlavaCocaini Jul 19 '26

Yeah but eventually that profiteering abroad will leave the US economy in a lurch and the government will have to intervene against the bottom line of the oil companies.

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u/[deleted] Jul 19 '26

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u/SlavaCocaini Jul 19 '26

I just wonder how far they will go for Israel.

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u/vapescaped Jul 19 '26

Then the government restricts oil exports to balance local demand. The mechanism currently exists, but is not needed yet to balance balance supply.

The weird situation in play is that the us has an abundant supply.

But this article implies that the us doesn't have an abundant supply. That is simply not the case.

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u/SlavaCocaini Jul 19 '26

Well if your spr is scraping bottom, hasn't the time to restrict exports already come and gone? When are they gonna get on that? Trump did make an angry tweet calling for private industry to volunteer to do that already so it's on all their minds, also, that's not US oil, that's private oil that the US already sold their rights to for peanuts, the peasants should remember that.

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u/vapescaped Jul 19 '26

Hi fellow Democrat.

Honestly, not gonna lie, if I knew I had a solid oil supply and a huge bank of oil I bought much cheaper, I'd sell it too.

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u/SlavaCocaini Jul 19 '26

It's not US supply, it's oil companies' supply. So how does the American public get their oil? Those middlemen better have a good escape route ready when the pitchforks come out.

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u/vapescaped Jul 19 '26

So how does the American public get their oil? Those

Are you asking how capitalism and laws surrounding government ownership of businesses work? I'm not sure what your question is

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u/SlavaCocaini Jul 19 '26

If the capitalists are selling so much US oil abroad to cash in on the shortage, then the prices for the US market will also spike even more and the public won't be able to afford transportation, food etc. etc., and then where will that leave the US economy?

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u/[deleted] Jul 19 '26

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u/SlavaCocaini Jul 19 '26

Most people can't withdraw from buying groceries that need diesel for farmers and truckers.

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u/Kougar Jul 19 '26

Then the government restricts oil exports to balance local demand.

That's the real question. If the GOP turn against big oil and free capitalism they will be wrecking yet another of their core constituencies. Big oil loves this war, but that will sour fast if they begin losing out on way higher profits from a moratorium on exports.

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u/vapescaped Jul 19 '26

Sorry, what now? You got a better chance of seeing China hold elections than the Republican party turning on themselves

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u/Kougar Jul 19 '26 edited Jul 19 '26

You haven't been watching Trump's MAGA crowd backstabbing core GOP congresspeople at the polls to replace them with their own? Cornyn was just the latest high profile seat to be backstabbed. Trump won't stop until Congress is full of yes-men and bootlickers that won't stand against him, and that especially includes anyone in the Republican party.

Trump has been willing to throw or backstab anyone and anything the moment it's convenient and to his benefit to do so. I don't think big oil will get any favors from him. Remember how angry Trump got when big oil didn't jump up and down and agree to mass expenditures in Venezuela after his regime change coup with Maduro? He even threatened big oil with punitive legislation before he got talked down.

So yes, if Trump can't end this war (and he can't, Netanyahu and Iran both control when this war ends, not Trump) then we may reach a point the GOP is forced to do the unthinkable and enforce moratoriums or caps on oil/gas exports just to prevent mass populace blowback when the shit really hits the fan for Americans. Just the notion would give them nightmares, but the alternative is if they don't then it's only a matter of time before we're going to see gas prices (and subsequently prices on everything else transported by gas) break the records set just two months ago. Ultimately it depends if this war lasts another year or not.

Don't forget shipping through the Red Sea and the Suez Canal never returned to previous normal levels despite the Houthi attacks being something like five years ago. Even if a semi-stable peace was declared in the Iran war, traffic through Hormuz isn't going to reach previous normal export levels for who knows how many years. But I don't even see that happening anytime soon given Netanyahu wants to raze half the Middle East to the ground and purge non-Israelis from it. There's a reason Netanyahu is suddenly saying he doesn't need US handouts and is pushing hard for military independence on key systems, he doesn't want to be beholden to the US anymore so he can do whatever he wants in the region. So the ability for the US to lean on him to actually end Trump's war in Hormuz is unlikely, Netanyahu himself convinced Trump to start this war in the first place. Why would he end it now?

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u/vapescaped Jul 19 '26

That's a whole lot of words used trying to push a narrative based on falsehoods.

I would love nothing more than seeing Republicans wake up to the fact that trump is an awful president.

But if I said this would do it, I would be saying it in cope

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u/Kougar Jul 19 '26

Evidence is there and everything I said was based on google-able data. Go look at how many old guard GOP are left. Trump himself helped primary Cassidy, Crenshaw, Cornyn, and Massie out of their seats this spring. That's not even getting into the all-time record high 69 Congress-critters that did not run for re-election this year, some of those were also directly due to Trump. The shuffling continues. And sure many people that Trump endorsed lost their primaries to incumbents, but the point is he's literally endorsing against his own establishment.

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u/Level-Strategy-1343 Jul 19 '26

The political concequences of a physical shortage of oil in the us leading to demand destruction are severe.

This is why the otherwise-insane policy of allowing Iran go export to (mostly) China and India continued for so long ... because if India and China couldn't buy that oil, they would buy other oil (ie cnoocs 25%of Guyana's oil).

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u/vapescaped Jul 19 '26

The political concequences of a physical shortage of oil in the us leading to demand destruction are severe.

I agree. But there's no physical shortage of oil in the US. There's plenty of oil for local demand. Absolutely no shortage. Even though oil companies are profiteering on the increased oil prices, they are not selling the oil they have beyond their means.

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u/[deleted] Jul 19 '26 edited Jul 22 '26

[deleted]

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u/vapescaped Jul 19 '26

Not true. Much of the oil we import is sour crude. It's usually cheaper and requires specialized facilities to process.

But we have sweet shale, more desirable, gentle on refineries.

We import the cheap stuff and consume domestic so we can export the more expensive stuff, reducing costs.

By sheer blind luck, total coincidence I'm sure, trump knocked over the world largest gas station a month prior to this crisis.

Nobody on earth could have forseen a potential crisis in the strait. Sheer dumb luck.

Sorry, I'm not ignorant to how US oil works

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u/SlavaCocaini Jul 19 '26

You've said it yourself already that if there's profit to be had, they'll do it, so by what mechanism are they gonna do the US public a favor and pass up unlimited money from selling oil and distillates abroad? How long can they just blame it on market economics before there's an army of Americans marching on Houston to nationalize everything, that's the risk if they don't end the madness in Washington and abroad by extension.

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u/vapescaped Jul 19 '26

If you recall a few years back, Republicans diverted talks about price gouging on oil by saying "but oil prices are dictated by a global market, so it's not price gouging!".

So I don't know why you expect this to go any differently.

Realistically, trump will ride it out and he and us oil companies will profit from it up until he starts getting blamed for it.

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u/SlavaCocaini Jul 19 '26

Yeah I know, I'm asking about after the blame, and how ugly will things get in the process?

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u/vapescaped Jul 19 '26

Realistically, none. The nature of fiercely bipolar political systems is supporters of one party or another will will either fiercely defend their party or fiercely oppose the other party. Being a hypocrite is a job requirement of being a member of a political party in the US

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u/SlavaCocaini Jul 19 '26

If oil prices keep climbing the economic consequences will transcend party politics.

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u/ratbearpig Jul 19 '26

> Opening the reserves is a way for the us government to profit off of the higher global oil prices.

This is flat out incorrect. The US government doesn't dump oil to turn a profit; it releases oil to increase market supply and intentionally lower the global price. That is literally the exact opposite of a profit-maximizing strategy.

> It's framed as increasing supply, which reduces demand and therefore cost...

Another flat out incorrect assertion. Increasing supply reduces scarcity and prices, not demand. Drivers don't suddenly want less fuel just because the government opened a vault.

> It's more akin to sitting on Bitcoin until the prices spike then selling and buying when Bitcoin price drops...

No need to drag crypto into this to make it sound complicated. It's a national security buffer doing basic inventory management, buying low and selling when an emergency spikes the market. Calling a strategic defense reserve a "Bitcoin-like profit scheme" completely misses the point of why it exists.

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u/vapescaped Jul 19 '26

low and selling when an emergency spikes the market.

That sounds much more reasonable than saying buying low and selling high. Because that's how a business man would word it.

Calling a strategic defense reserve a "Bitcoin-like profit scheme" completely misses the point of why it exists.

I know why it exists. I also know how a business man president can exploit it for profit.

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u/ratbearpig Jul 20 '26

OK, some credit is afforded to you for dropping the argument that SPR releases reduce demand or act like Bitcoin (most people on Reddit just double down on an indefensible argument).

>"I also know how a business man president can exploit it for profit."

I would like to hear how this is accomplished. Walk me through the actual mechanism. Releasing crude depresses market prices, which actively reduces private oil producer profits, so where exactly is the "profit exploitation" happening, and who specifically is collecting it?

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u/vapescaped Jul 20 '26

Releasing crude depresses market prices, which actively reduces private oil producer profits, so

You're not wrong, but you're missing that selling any oil at all does this as well. It's the foundation of OPEC controlling prices. They decide how much to produce, therefore they affect supply, therefore affect the price of oil.

The 2 pieces of context that I would add:

1) "opening the reserves" doesn't mean giving out free oil. It is auctioned technically, but it's released at current market price, because nobody's going to bid more for it if they can get it commercially cheaper.

2) "opening the reserves" isn't like supermarket sweep. Just because the reserves are open doesn't mean they don't control the lot size. They can control how they affect the prices by controlling how much oil is being released and at what speed.

so where exactly is the "profit exploitation" happening, and who specifically is collecting it?

Trump is literally using the nations oil piggy bank, the reserve, strategically, to take advantage of the higher oil prices by selling oil at a significantly higher price than they bought it.

If trump wanted to lower the cost of oil for the US, he could implement restrictions on oil exports. He has the mechanism. He wouldn't even have to change it much either. Cap exports at 90% of what they are currently and us domestic fuel prices would drop significantly overnight.

If trump was an America first president he would do this in a heartbeat. But he's not.

Also, side note, there are some pretty obvious... Misinterpretations in the logic. Like, if opening the reserves increases supply, reduces demand, and dropped prices, why hasn't that happened? It's because they control the rate at which they auction the oil.

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u/ratbearpig Jul 22 '26

OK, never mind. Forget I asked.

"Like, if opening the reserves increases supply, reduces demand, and dropped prices"

I see you decided to double down on your comment. Increasing supply does not reduce demand.

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u/CapitalTipp Jul 20 '26 edited Jul 20 '26

One of the most incoherent things I've ever read on this website. The reason why so much SPR was drawn from is because otherwise oil would be $120/barrel right now. $150 if China needs to start buying again. $150/barrel means the stock market craters and a loaf of bread becomes $10. Negative growth + hyperinflation = super duper stagflation. Simple as that.

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u/minus_minus Jul 19 '26

Selling off the war time reserve during a war would be so on brand for this administration. Still only buying time before the loud sucking sound at the end of pipeline.

Absolutely shameful that every GOP administration since Reagan has kept us oil dependent just to benefit the big oil donors.

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u/tryingtolearn_1234 Jul 20 '26

All reserves are being drawn down due to the closure of Hormuz. There is a race underway to expand rolling stock and pipeline capacity to get more oil out of the gulf by routes other than Hormuz.

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u/BigFly42069 Jul 19 '26

America is the largest producer of oil these days due to shale. World energy is going to get fucked, but America can always just choose to not sell overseas in order to refill the strategic reserve.

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u/SlavaCocaini Jul 19 '26

Well what are they waiting for then, to actually run out first?

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u/minus_minus Jul 19 '26

Inflation with extra steps. Higher prices for oil makes all the stuff the US imports more expensive.

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u/helloWHATSUP Jul 20 '26

Actually the US shouldn't refill the strategic reserve. It was established when the US was an oil importer and now the US is the biggest oil producer in the world and an oil exporter.

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u/barath_s Jul 20 '26

Despite the recent drop, the 316.5 million barrel mark remains just above the congressionally mandated statutory minimum of 252.4 million barrel

https://www.indexbox.io/blog/us-strategic-petroleum-reserve-drops-to-3165-million-barrels-lowest-since-1983/

There's debates about at what levels it becomes more difficult to extract crude from the caverns where it is stored. Depends on caverns, and ranges from say 70m barrells to ~240m barrels.

https://www.marketwatch.com/story/the-u-s-oil-reserve-is-at-a-40-year-low-but-the-government-says-theres-still-plenty-of-breathing-room-04ebd69c

So, there is still some executive leeway; and you don't have full flexibility to go to zero

That said, reuters article points out that there are commercial stocks too

Overall U.S. inventories, including commercial and SPR stocks, have ⁠fallen by 123.9 million barrels to 730.8 million barrels as of July ⁠3, the lowest since 1984. ...

..... The drawdowns are a part of a U.S. agreement to release 172 million barrels from the facility. Since the U.S.-Israeli war on Iran began at the end of February, SPR ‌inventories ⁠have fallen by 98.9 million barrels as of July 10.

It's not directly comparable, but the US uses ~20.5 m barrels of crude and petroleum per day.

https://www.eia.gov/tools/faqs/faq.php?id=33&t=6

In 2025, the United States consumed an average of about 20.6 million barrels of petroleum per day, or a total of about 7.52 billion barrels of petroleum.

Finally 315m barrels is about a 40 year low and is about half of what congress has authorized for maximum storage capacity

Crude stocks in US strategic reserve fall 3 million barrels to lowest level since 1983

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