US oil inventories fall to 'precariously low' level as Iran war disrupts supply

JumpCrisscross

> The US government is continuing to release oil from its strategic petroleum reserve, which saw a drawdown of 3.8mn barrels to 307.7mn barrels — the lowest level in more than 40 years. Its operational minimum, below which further withdrawals risk damaging infrastructure and disrupting pipeline operations, is estimated at 180mn to 200mn barrels, according to industry analysts. So [EDIT: half] a year of reserves left at current rates and levels.

mullingitover

The fun part of this is the crack spread doesn't care about the relatively low price that crude is selling for. Refined petroleum is going for eye-watering prices, and will continue to do so for a very long time, even if peace breaks out tomorrow. Also seems pretty doubtful that oil prices would drop even if the war ended, given that everyone is going to be scrambling to refill their reserves for a very long time. On top of that, a lot of wells have been capped, which is a destructive act, so it'll take years to repair the supply. The real winners will be everyone who destroyed their own oil demand. I went out and bought an EV in May to replace an ICE vehicle, and the other car in the household hasn't burned through a full tank in the months since. They may have killed the EV subsidies in the US but they just went out and created a huge regressive tax on everyone not driving an EV.

kittikitti

This directly because of the U.S. support of Israel. I also think as long as America keeps supporting Israeli military actions, there will be inflation. I won't forget how they enacted economic policies that knowingly caused layoffs of so many friends and colleagues but spared Israel with countless billions in spending. What was the point in increasing interest rates if we're going to enable genocides, increase gas prices, and spend so much money on defending America's worst ally?

credit_guy

For those who don't have access to ft.com, here's a link with the time series of the SPR from the EIA: https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=W...

TitaRusell

Don't worry everything is going according to god emperor Trump's plan. TRUST THE PLAN

hadlock

So the US has 25 weeks, or 6 months of oil reserves left. One thing to note is that most jet fuel for europe comes from persian gulf oil. The US has been supplying Europe with jet fuel (at the cost of American gasoline) since the beginning of the war. If the US stops pumping out of the strategic reserve, there's not enough oil to produce both enough gas to stay below $5 a gallon, and keep the transatlantic/european aviation industry afloat. Iran has nothing to lose by turtling through the mid-terms and into January. They've been preparing for this war for 45 years, and everything is mostly going according to plan.