The risks of the strategic petroleum reserve’s four-decade low
Bottom Lines Up Front
- Strategic Petroleum Reserve (SPR) levels have reached historic lows, triggering serious concerns about the reserve’s ability to continue to function.
- Not all releases from the SPR are the same. Instead of an outright sale, this year’s release is the first of two phases of an exchange. The second phase will refill the reserve with the same volume that was released—ideally at relatively low prices that would allow the US government to lock in an effective profit.
- Refilling occurs at a much slower rate than withdrawals, meaning the SPR will potentially be in fill mode for more than a year. If refilling is successful, it will sidestep some of the significant maintenance issues that continue to plague the SPR.
The Strategic Petroleum Reserve (SPR) held 284.6 million barrels in the week ending September 18, 2026, its lowest level since November 1982, when the reserve was being filled for the first time. This latest decline traces to a specific date: February 28, 2026, when military action among the United States, Israel, and Iran shut down most tanker traffic through the Strait of Hormuz, a waterway that normally carries roughly a fifth of the world’s seaborne oil. Brent crude, which opened the year near $61 a barrel, breached $100 on March 12 and closed the quarter at $118 per barrel.
This release was part of a 32-member-nation effort coordinated by the International Energy Agency (IEA) to release 400 million barrels of oil and refined products, the largest joint stock release the agency has authorized. The United States committed 172 million barrels, a share comparable to the 180 million barrels it released in 2022 after Russia invaded Ukraine (though the total decline will not reach that level). The net decline to date this year is 125 million barrels. The four-decade low is a top headline for markets, as this data from the US Energy Information Agency (EIA) is updated weekly, so it provides the most transparent data point for dwindling global stockpiles. This low and still declining number is of concern, as the strait remains effectively closed. Washington is managing this release through an exchange instead of just a normal withdrawal, a mechanism designed to both release the oil and then, at a later date, refill it. At the same time, there is an ongoing debate on the potential impacts of this low level, with some engineers already warning publicly that going much lower risks damaging the salt caverns that hold the oil, while others have argued that a lower level is not an issue.
What the reserve is built to do
Congress created the SPR in the Energy Policy and Conservation Act (EPCA) of 1975, authorizing storage of up to one billion barrels as a statutory ceiling. The system built never reached that figure. It hit its high-water mark of 726.6 million barrels on December 27, 2009, and a 2024 revision to the Department of Energy’s (DOE) technical criteria set the current authorized capacity at 713.5 million barrels, of which DOE estimates it can effectively hold about 680 millionbarrels. Every subsequent number in the reserve’s history—including the 293.4 million barrels it holds now—should be measured against that 680- to 713-million-barrel ceiling, not the old billion-barrel figure that still circulates in casual commentary.
Oil leaves the SPR through three legally distinct routes, and conflating them is the most common error in coverage of the reserve. These three routes are defined as follows:
- An emergency drawdown under section 161 of EPCA, codified at 42 U.S.C. 6241. A full-scale release requires a presidential finding that a severe energy supply interruption exists. A narrower provision, subsection (h), lets the secretary of energy authorize a smaller drawdown without that finding, but by statute, such limited drawdowns cannot take the reserve below an aggregate of 252.4 million barrels.
- A congressionally mandated sale, a route used multiple times since 2017 to offset unrelated spending. The proceeds count as budget receipts, and the oil doesn’t come back unless Congress later appropriates money to buy more.
- An exchange, governed by the acquisition authority in section 159 of EPCA, in which a company borrows crude from the reserve and is contractually obligated to return it, plus a premium, on a set schedule. Exchanges require no emergency finding at all—which turns out to matter a great deal for what’s happening in the current crisis.
How the drawdowns differ
Treating every SPR release as interchangeable misses the point. Through 2025, the United States carried out four emergency releases coordinated with other IEA members, totaling nearly 239 million barrels: 17.3 million during Operation Desert Storm in 1991, 11.0 million after Hurricane Katrina in 2005, 30.6 million during the Libyan civil war in 2011, and 180.0 million after Russia’s 2022 invasion of Ukraine. The last of which, the Government Accountability Office (GAO) calls the largest sustained drawdown to date and, in its own words, an unplanned stress test of the system. It required repeated emergency repairs to leaking pipes and pumps even though it drew the reserve down at just over a fifth of its designed maximum rate of 4.4 million barrels per day (a level it was designed to achieve for up to 90 days straight when at or near full capacity). All four of those historical releases were structured as sales.
Separately, DOE has run more than a dozen smaller exchanges tied to domestic disruptions rather than international coordination, including a 1.8-million-barrel exchange after the Keystone pipeline’s 2022 shutdown and a reverse exchange during the pandemic, in which the SPR stored 32 million borrowed barrels beginning in 2020 and returned 29.5 million barrels the following year.
The 2026 release breaks from that pattern in a specific way: DOE is executing the entire 172-million-barrel commitment as a series of exchanges rather than a sale, the first exchange DOE had run since a 50-million-barrel solicitation in November 2021. The opening solicitation, published March 13, covered up to 86 million barrels for delivery in April and May, with awardees required to return between 18 and 22 percent more oil than they borrowed—two to seven times the 3- to 8-percent premium required in 2021, reflecting how much steeper backwardation had become in the futures curve. Later tranches pushed premiums as high as 28 percent.
Arnab Datta, managing director of policy implementation at Employ America, argued at the time that because DOE was awarding contracts to whichever bidders offered the largest premium rather than whichever could take delivery fastest, oil would likely not reach the market before April. DOE beat that prediction: the first 45.2 million barrels were awarded and shipments began nine days after the initial announcement, on March 20. Because a sale simply removes barrels, while an exchange obligates their return, the 2026 mechanism is built to refill the reserve as a condition of the release itself—something the 2022 sale never did. This provides the potential benefit that companies will remove the barrels for a higher price than they will replace them. This blunts any criticism that the withdrawal would permanently leave the SPR in a worse position and, if the math works out as hoped, allow for the average acquisition cost to be lower.
Refilling is complicated—and slower—than drawing down
The gap between announced ambition and funded reality is wide. DOE has estimated it would cost approximately $20 billion to purchase the roughly 250 million barrels needed to refill the reserve to its effective peak of 680 million barrels, at prices near $80 a barrel. Against that figure, Congress appropriated just $171 million toward direct purchases in the 2025 reconciliation law (the One Big Beautiful Bill Act), enough for roughly 2 million barrels, alongside a separate $218 million for facility maintenance and repair. As of May 2026, DOE had put that purchase money to work on a single contract for 1 million barrels. Separately, the Biden administration’s post-2022 repurchase push—funded by 2022 sales revenue and a newer fixed-price purchase authority—closed out in November 2024 with a deal covering close to 200 million barrels. DOE bought 59 million barrels outright, and Congress agreed to cancel 140 million barrels of mandated sales that would otherwise have kept draining the reserve. Set against a 172-million-barrel drawdown already underway, none of these figures come close to closing the gap without a large new appropriation or a very favorable run of exchange premiums.
DOE’s own criteria call for the SPR to release crude about six times faster than it can be filled, a peak drawdown rate of 4.415 million barrels a day against a fill rate of only 0.785 million barrels a day. Neither figure describes what the reserve can currently do. As of December 2025, GAO found the SPR’s effective drawdown capability at 61 percent of its designed rate and its fill capability at just 56 percent, the product of construction outages, an unaddressed major-maintenance backlog, and low cavern inventory at some sites. More than a quarter of the reserve’s inventory was not available for drawdown at all, largely because one reserve site, known as Big Hill, had zero drawdown or fill capability at the time of the assessment due to ongoing life extension (second phase) construction. Sandia National Laboratories, the SPR’s longtime geotechnical advisor, concluded in late 2024 that well deformation is now outpacing DOE’s ability to repair it at current funding levels. Specifically, another reserve site, Bryan Mound, had a well fail without warning in May 2024 and lost an estimated 400,000 barrels, and a split pipe that life extension work had not replaced spilled roughly 170 barrels at the same site in January 2026. At another site, Bayou Choctaw, three of its six caverns have only one drawdown left before they risk losing structural integrity.
The exchanges, however, will soon pivot from withdrawing crude from the SPR to refilling it, and there is a new potential element for refilling recently introduced by the administration, namely refilling with crude from Venezuela. Unfortunately, Venezuelan crude is exceedingly heavy. Crude from its Orinoco belt has an API gravity of between 9.5 and 12 degrees, while its primary export grade, Merey 16, has an API of 16 degrees. For comparison, oil that has an API of below 10 degrees does not float on the water.
API levels across the four caverns for sour crude range from a high of 33.3 degrees in Bryan Mound to 30.8 in Big Hill. In its Long-Term Strategic Review of the SPR in 2016, DOE reported to Congress that it does not store heavy oil (which it defined as below 22.3 API) because it found the costs outweigh the benefits, as it would cause considerable operational difficulties. As such, Venezuelan crude does not appear to be a real option for refilling the depleted caverns—which will already be busy for the next several months or more refilling from the exchanges.
Venezuelan crude aside, SPR fill rates are much slower than withdrawal rates. Releases began in late March at a pace of 1.4 million barrels per day and averaged 800 thousand barrels per day as of August 28. Three of the caverns, Bryan Mound, West Hackberry, and Big Hill, have maximum fill rates of 225 thousand barrels per day. At present, West Hackberry has an issue with its brine disposal wells so can only fill at 112 thousand barrels per day. Bayou Choctaw maximum fill rate is 110 thousand barrels per day. Taken together, under optimum conditions, the system can fill at a combined rate of 672 thousand barrels per day. The 133 million barrels from the exchanges will take a minimum of 198 days. Another 20 million to 30 million barrels is also due to be filled from prior congressional requirements, which will take another thirty to forty-five days. That means, at a bare minimum, the fill rate is already set to be at maximum for a minimum of 220 to 230 days. And this is assuming the maximum rate is both available and can be sustained. In reality, it could take as much as double that amount of time given the pressure this sustained fill will put on the infrastructure.
The caverns
This leaves the concern of the dwindling stockpiles and the long-term impact on the caverns, as GAO highlighted in its report closing in May. In September, with the reserve below 290 million barrels and still falling, the maintenance backlog GAO had documented turned into a live operational question. Trade press and network coverage began reporting that continued rapid drawdown could damage the caverns themselves—not simply empty them—making it harder for the SPR to respond to whatever comes next. Amos Hochstein, a former senior energy adviser to President Joe Biden, put a number on the anxiety: he told CNBC he didn’t know anyone who thought the reserve could safely go much below 300 million barrels. DOE pushed back through spokesman Ben Dietderich, who argued the caverns are “always full” and that only about 70 million barrels need to stay at the bottom of each cavern to keep the extraction pipes submerged in oil rather than water. That’s well below where the reserve sits today, but also well below the 252.4-million-barrel floor Congress wrote into the statute for subsection (h) drawdowns.
That gap between these numbers is the issue. Because the 2026 release is running entirely through the exchange authority rather than subsection (h), none of that statutory floor applies to it. DOE has projected the reserve will bottom out around 243 million barrels once the full 172-million-barrel commitment is delivered—below the number that would stop a limited drawdown under the law, constrained only by whatever DOE judges the caverns can tolerate. Three weeks before the reserve crossed below 300 million barrels, Arnab Datta had published a piece for Bloomberg’s Odd Lotsnewsletter asking how much running room the SPR actually has left. By mid-August, cavern engineers were answering that question in real time.
Datta has written about SPR policy since 2022, arguing that the exchange mechanism does more than refill caverns: a locked-in forward price gives producers a signal at a moment when new shale output takes six to nine months to bring online, which can encourage the kind of investment that makes future emergency releases less necessary. In February 2024, Datta and Daleep Singh—then between government roles—proposed in the Financial Times converting the SPR into a broader Strategic Resilience Reserve modeled on the Federal Reserve’s financial stability toolkit, arguing that the IEA’s 90-day import-cover standard was designed for an import-dependent country the United States no longer is. That argument has since found its way into legislation, though not for oil directly: the bipartisan SECURE Minerals Act, introduced January 15, 2026, and endorsed by Employ America among a dozen other groups, would create a separate Strategic Resilience Reserve Corporation explicitly modeled on the SPR but scoped to critical minerals rather than crude oil. The SPR itself remains governed by the original 1975 statute.
Conclusions
The SPR’s absolute level is genuinely historic. But since the United States became a net petroleum exporter in 2020, it is no longer bound by the IEA’s 90-day net-import stockholding requirement, though it remains obligated to contribute just over 40 percent of any collective IEA release—almost exactly the 43 percent share it committed in March. The question a few years ago would have been simply whether the reserve is low or too low. It plainly is, by any historical measure.
The question now is narrower and of greater importance to oil markets and longer-term energy security: whether a refill mechanism built around exchanges and premiums, tested for the first time at this scale, can rebuild the reserve faster than deferred maintenance and the still-unresolved war in the Middle East can catch up with it. For a time, deferred maintenance was winning, but there are few indications the war will be over anytime soon, and the impacts on crude markets are being felt with oil rising above $100 per barrel in September, while refined products such as diesel are reaching historic highs.
Additional pressure from dwindling crude stockpiles will add to the tightness and market concerns, particularly as the market is again auguring that yet another release may be needed, just as the SPR is prepping for a fill that could take a year or longer. Even without another SPR release, if the conflict is not resolved, there are not enough barrels available to put into the SPR without causing another round of price increases, as the market would be made even tighter.
Jamie Webster is a partner and director at BCG and serves as the COO for BCG’s Center for Energy Impact. He is also a nonresident fellow at the Colorado School of Mines Payne Institute as well as the Global Center for Energy Analysis. He has more than two decades of experience analyzing energy markets for the C-suite.
Morgan D. Bazilian is a nonresident senior fellow with the Atlantic Council Global Energy Center and the director of the Payne Institute for Public Policy and professor at the Colorado School of Mines. Previously, he was lead energy specialist at the World Bank and has over two decades of experience in energy security, natural resources, national security, energy poverty, and international affairs.
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Image: An oil storage tank and crude oil pipeline equipment is seen during a tour by the Department of Energy at the Strategic Petroleum Reserve in Freeport, Texas, U.S. June 9, 2016. REUTERS/Richard Carson/File Photo