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US Strategic Petroleum Reserve drawdown raises oil market volatility
Oil prices are rising again as U.S. crude inventories fall and the SPR approaches critical levels, with recent releases building on an already depleted baseline.
Oil prices are ticking higher, driven by renewed tensions in the Persian Gulf and by a domestic supply signal, U.S. crude inventories are down again while the Strategic Petroleum Reserve is moving closer to critical levels, OilPrice reports.
The outlet says the inventory factor became especially important after the United States and Israel launched their war against Iran at the end of February, when SPR stocks helped prevent a sharp and painful spike in crude prices.
OilPrice adds that the OECD agreed to a controlled release of 400 million barrels, and China reduced oil imports by leaning into its own reserves, with the U.S. contributing 172 million barrels as part of the joint release.
It also notes the U.S. federal government has been selling oil from the SPR, much of it going to Europe, and that releases under the Biden administration already lowered the reserve level without being fully replenished, leaving a lower starting point for this year’s drawdown.
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