US oil reserves plunge to a 40 year low

The Biden administration has been draining the strategic petroleum reserves since the start of the Ukraine war in February 2022 to cap energy prices. At present the super power faces a double edged sword because its oil reserves have plunged to a 40-year low and global crude prices hover around US$100/barrel.

Reportedly, there has been a steep drop in US strategic petroleum reserves. The plunge in oil stocks highlights the mounting risks to US energy security. Low domestic reserves could increase reliance on imports, potentially making it more vulnerable to supply disruptions and price volatility in the global oil market.

The international crude benchmark has charged upward in recent months, jumping almost 30% since late May this year.

Oil prices have been climbing as top global producers, led by Saudi Arabia and Russia, extend production cuts announced earlier this year in a bid to maintain price stability.

After the Ukraine war broke out in early 2022, the US government has used its Strategist Petroleum Reserve as its biggest buffer against global energy-price volatility.

Last year, it had released 180 million barrels from the SPR to hedge against expensive oil prices, and cool decades-high inflation.

While the Biden administration has been planning to replenish the SPR, the amount of barrels left in the reserve is currently less than half of the all-time highs reached in 2010.