US oil reserve could shrink to 243 million barrels — OilPrice
The US Strategic Petroleum Reserve could shrink to about 243 million barrels following the planned release of another 39 million barrels of oil, OilPrice reports. The publication notes that this volume may be below the level considered optimal for the reserve’s effective operation.
Further release of reserves
According to the report, the United States has already released 172 million barrels as part of a 400-million-barrel coordinated release agreed by OECD countries. The OilPrice author writes that these reserves, together with China’s reduced oil imports, helped avoid a sharp price spike after hostilities around Iran began in late February.
OilPrice also notes that the new release of oil from the reserve comes after large-scale sales under the Joe Biden administration, when stocks declined substantially and were not fully replenished. Part of the oil from the US Strategic Petroleum Reserve was sent to Europe, according to the publication, which faced oil supply problems amid sanctions against Russian energy resources and the war in the Middle East.
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Risks to reserve infrastructure
The article, citing Reuters, says that the operational minimum level of stocks in the reserve is estimated at between 250 million and 300 million barrels. Oil is stored there in salt caverns above a layer of water. As oil is pumped out, the water level rises, which may increase risks to the cavern walls, pipelines, and pumping equipment.
Siddharth Misra, a petroleum engineering professor at A&M University, told Reuters that operating with volumes below 250 million barrels puts the reserve’s infrastructure in a danger zone. The report emphasizes that lower stocks mean a smaller volume of oil that can be quickly supplied to the market in the event of supply disruptions.
Plans to replenish with Venezuelan oil
US President Donald Trump said the administration intends to replenish the reserve with Venezuelan oil. At the same time, OilPrice points to technical difficulties: Venezuelan oil is heavy, while the reserve’s infrastructure was designed primarily for lighter grades. ClearView Energy Partners analyst Kevin Book, quoted by Reuters, suggested that heavy Venezuelan oil could be sold to purchase lighter grades for the reserve, but such a process could take years.
