After the White House announced yesterday that it would begin replenishing the SPR in June, the roller coaster ride of crude oil could be ending. Rumors about this started to circulate at the beginning of the week. They helped provide a base for crude prices, which were under pressure due to disappointing economic data. In the past, the US government talked about restarting purchasing by the end year.
The US paused the release of crude oil from the SPR in early this year due to the decline in crude prices. Recently, new withdrawals have been made and inventories are now at their lowest level since 1983. The US had 585M bbls of strategic reserves at the start the Ukraine conflict. In an attempt to lower crude oil prices, the US has since sold over 222M barrels. This leaves the current stockpile of 363M barrels. The US uses around 20M barrels of crude oil per day.
The situation is now normal.
It’s been over a year since the start of the war in Ukraine, with progressively stiffer sanctions on Russia meant to curb its exports of oil. New export routes were opened and while the West stopped buying oil from Russia almost entirely, Russia now exports to China and India in a similar rate to before the conflict.
