The United States' Strategic Petroleum Reserve (SPR) has fallen to its lowest level since 1983, according to latest data, intensifying concerns over the world's ability to respond to future supply disruptions. The reserve, which once held more than 700 million barrels of crude, has been significantly reduced following two years of emergency releases aimed at stabilising global oil markets after Russia's invasion of Ukraine.
The drawdown, which accelerated under the Biden administration, was designed to cap soaring petrol prices and ease inflationary pressures. However, with the reserve now at critically low levels, analysts warn that the US has far less capacity to intervene in the event of another supply shock. 'The SPR was a strategic buffer; that buffer is now wafer-thin,' said one energy analyst, speaking on condition of anonymity.
For British motorists and businesses, the implications are tangible. The UK does not hold a strategic reserve of its own — relying instead on commercial stocks and international markets. A depleted US reserve means less global cushion against price spikes, which could keep Brent crude elevated and push petrol prices higher at the pumps. Brent crude was trading around $84 per barrel on Friday, up from $72 a year ago.
The FTSE 100 edged down 0.3% to 8,210 points in afternoon trading, with energy stocks such as Shell and BP among the few gainers. Shell rose 1.1% while BP added 0.8%, as investors bet on sustained high oil prices. The broader market was subdued amid renewed concerns about global demand and the impact of higher energy costs on consumer spending.
UK pension funds, which hold significant exposure to oil majors and broader equity markets, could see increased volatility. Analysts at a London-based brokerage noted that while higher crude prices boost profits for energy companies, they also risk dampening economic growth and squeezing household budgets. 'The SPR news adds a layer of uncertainty to an already fragile energy market,' the note said.
Environmental groups have seized on the depletion as evidence of the need to accelerate the transition away from fossil fuels. 'We are emptying the strategic reserve to feed an addiction that leaves us vulnerable,' a spokesperson for a UK climate campaign said. 'The real solution is not more oil, but less dependence on it.'