The International Energy Agency (IEA) has begun releasing 100 million barrels of oil, part of a larger plan to address the impact of the Hormuz crisis. However, the depletion of strategic oil reserves has raised alarms, with the U.S. Strategic Petroleum Reserve (SPR) now at its lowest level since 1983. This depletion is a cause for concern, as the operational minimum for storage systems is between 250 and 300 million barrels. The U.S. SPR, which has been drawing oil since earlier this year, is nearing this critical threshold, risking infrastructure damage and limiting future response capabilities.
Global oil inventories are also under pressure, with a 95 million barrel drop in August. Since February, total draws have reached 507 million barrels, equivalent to 2.8 million barrels per day. While OECD commercial inventories have slightly increased, the strategic reserves have been drawn down, leaving the system vulnerable. Aramco’s CEO, Amin Nasser, warned that replenishing these reserves could take up to two years, contingent on the reopening of the Strait of Hormuz. This delay heightens the risk of severe supply shocks if the conflict continues into 2027.
The IEA has pledged to release more emergency stocks if needed, but the situation remains precarious. With over 1 billion barrels already drawn since the start of the conflict, less than 6 billion barrels remain in storage. These reserves are essential for maintaining the functionality of the global storage system. Countries, particularly in Asia, are now accelerating efforts to build their own oil stockpiles, given their heavy reliance on Middle Eastern imports. However, securing affordable oil for these reserves will take time, with prices expected to remain elevated for the foreseeable future.