The Strategic Petroleum Reserve is nearing Reagan-era lows amid the Iran conflict
FOX Business White House Correspondent Edward Lawrence explains that rising fuel and energy prices have driven inflation faster than wage growth, while President Donald Trump's oil conservation strategy aims to ease the pressure.
The US Strategic Petroleum Reserve (SPR) is heading towards a decline in the Biden era towards levels not seen since the Reagan administration.
According to the latest data from the US Energy Information Administration's fuel situation report for the week ending June 5, SPR fell to 349.2 million barrels, with nearly 9 million barrels being pumped each week.
The last time it reached this level was under the Biden administration in July 2023, when there were 346.7 million barrels in the SPR. If the stockpile continues to fall, the US crude oil emergency could reach a decade level not seen since August 1983.
Energy market experts are warning of a downturn as the Trump administration draws heavily on domestic reserves to counter the effective closure of the Strait of Hormuz during the Iran war.
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“This should have a big impact on all American consumers,” said President and CEO of the American Petroleum Institute Mike Sommers in an interview with CNN. “Because as those books come down and production can be ramped up, you're going to start seeing a bigger impact at the pump.”
A contractor works on a crude oil pipeline at the US Department of Energy's Bryan Mound Strategic Petroleum Reserve in Freeport, Texas. (Getty Images)
“That will happen over time,” warned Sommers, “but again, it's because of American production that we haven't seen the price increases that you've seen in other parts of the world.”
“It's a pretty big deal to experience a ten-year price drop,” GasBuddy's head of analytics Patrick De Haan told Fortune. “The longer this goes on, the fewer tools managers have to deal with it and the greater the risk of a cost slingshot.”
American Petroleum Institute CEO Mike Sommers joins 'Mornings with Maria' to warn that declining US oil supplies and global supply disruptions could result in higher fuel prices for American consumers.
Under Biden's leadership, the SPR decreased by 243 million barrels to deal with supply disruptions during the pandemic and Russia's invasion of Ukraine, according to a Fortune report. A few months ago, the Trump administration authorized the total withdrawal of 172 million barrels due to the active conflict with Iran.
Oil prices rose 3.9% in May amid oil supply disruptions in the Middle East, with prices up 23.5% last year. The Bureau of Labor Statistics noted that the labor index accounted for more than 60% of the overall consumer price index (CPI) in May. Gasoline prices increased 7% monthly in May and are up 40.5% compared to last year.
“We're lifting weights right now. We're at about 350 million barrels left in the Strategic Petroleum Reserve. You have to have about 20% of that left to work, for our system to work, so we're getting to levels where we're starting to worry,” Sommers said.
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Fox News national security correspondent Jennifer Griffin reports on President Donald Trump saying Iran shot down a US Apache helicopter over the Strait of Hormuz in 'Kudlow.'
“The thing we can do in the short term to solve this problem is to find the Strait [of Hormuz] open as fast as possible,” Sommers said.
Under Secretary of Energy Kyle Haustveit told FOX Business' Edward Lawrence on Wednesday: “We're borrowing barrels for the near-term supply challenge, but in return, the people who get those barrels are returning more barrels. On average, we're seeing more than a 25% premium.”
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Eric Revell of FOX Business contributed to this report.
