US crude oil and petroleum product inventories have fallen to their lowest level in more than two decades, as shipping restrictions in the Strait of Hormuz continue for a fourth month amid the war between the United States and Iran. The decline is attributed to the Donald Trump administration's release of Strategic Petroleum Reserve (SPR) stocks to curb soaring oil prices, combined with a surge in US crude exports.
According to the Financial Times (FT) on Wednesday, the US Energy Information Administration (EIA) said US crude oil (including the Strategic Petroleum Reserve) and petroleum product inventories totaled 1.57 billion barrels as of the 29th of last month. The figure, down 10.6 million barrels from a week earlier, marks the lowest level in about 22 years since May 2004.
Both commercial crude and SPR stocks declined simultaneously. Commercial crude oil inventories stood at 433.7 million barrels, down 8 million barrels in a week. SPR stocks also fell 8 million barrels over the same period to 357.12 million barrels, the lowest level since January 2024.
US crude exports are soaring to "record levels." According to the EIA, US crude exports surged from 4.4 million barrels per day to 5.8 million barrels per day. This is estimated to exceed the production of many major oil-producing nations. The increase came as European and Asian refiners boosted purchases of US crude amid growing concerns over Middle East supply disruptions following the war in Iran.
However, concerns are also growing over the pace of the decline in US inventories. Neil Chapman, senior vice president at ExxonMobil, warned at a conference in New York on the 28th of last month that "the crude futures market is underestimating the supply crisis stemming from the war in Iran," adding that "global crude inventories could fall to extremely low levels within the next two to three weeks."
Warnings that international oil prices could surge again are also mounting. Bob McNally, president of energy consulting firm Rapidan Energy Group, noted that "if the Strait of Hormuz is not reopened to tanker traffic, oil prices could spike to $200 per barrel this summer."
