this post was submitted on 09 Jul 2026
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I'm guessing this is a result of 3 factors:
Hormuz closure.
Russian refineries getting blown up by Ukraine. (And then Russia using up what fuel it does still have in an attempt to alleviate shortages and keep the front lines supplied.)
The US emptying out their strategic reserves in a desperate attempt to prevent gas prices from going even higher due to the former two.
For a product with inelastic demand, that is very close to zero if you define zero as disruptions.
There's a pretty big amount at the bottom of the SPR that's unusable sludge.
Would you not rotate stock? I don't know why any supply would be first-in-last-out. We shouldn't be describing a reserve that is one container the size of a lake.
https://www.energy.gov/hgeo/opr/spr-quick-facts
"The Strategic Petroleum Reserve (SPR), owned and operated by the U.S. Department of Energy, is a federally managed network of four sites located along the Gulf Coasts of Texas and Louisiana. Each site contains deep underground storage caverns carved into natural salt domes, engineered to securely hold large volumes of crude oil."
There are 61 total caverns.
Also Saudi Arabia / OPEC selling low to undercut other sources to establish dominance on the market.
I wasn't aware of it before I saw articles talking about how we are using so much of the SPR currently. But apparently using so much of it actually can cause the caves/caverns to warp and start various chunks of the walls to fall. So even if it isn't factually about to run out, it is a big issue to be creating the "emergency" requiring pulling from it.
I guess it is a big win for the private companies that get the sellers market in government needing to fill it back up (and of course basically double-dip in profits from higher prices for normal use).