America’s Emergency Oil Reserve Falls to Its Lowest Level Since 1982

The U.S. Strategic Petroleum Reserve held roughly 283 million barrels at the end of September, its lowest level since October 1982, after Washington committed 172 million barrels to soften the supply shock from the Iran war, OilPrice.com reports, citing Reuters.

Much of the release was structured as exchanges that companies must repay with premiums, adding back about 40 million barrels over time. But the reserve fills far more slowly than it empties: it is designed to take in under 0.8 million barrels a day against a drawdown capacity of about 4.4 million, and in practice runs below its design rate. The Energy Department estimates it would cost about $20 billion to buy back roughly 250 million barrels, while Congress has set aside just $171 million.

There is little agreement on how low the reserve can safely go. The Energy Department cites a technical minimum of around 70 million barrels, a Texas A&M researcher puts the practical floor at 250 to 300 million, and executives in a Dallas Fed survey most often chose 100 to 150 million.

Read the original story at OilPrice.com.