AI image credit: Norm Dempsey, ChatGPT. Data source: Weekly US ending stocks of crude oil in SPR. As of July 22, 2026, the latest EIA report places the SPR at 311.447 million barrels based on inventory for the week ending July 17. The May 2026 GAO report to Congress listed the SPR at 413 million barrels, or 58% of its 713.5-million-barrel authorized capacity (that figure predates the emergency releases that began in March 2026, so is outdated).
TLR recently provided a critical and objective research analysis of the Strategic Petroleum Reserve (SPR). We have permission to share it below.
In my view, TLR is one of the best bargains around as a research service. The work of Philippa Dunne and Doug Henwood is objective, nonpolitical, and seriously researched. The labor force data and state-specific information qualify TLR as a unique service. And the cost is small for TLRWire — just $27 per month. I read both TLRWire and TLR on the Economy regularly.
We excerpt below the section of the July 15 edition of TLR on the Economy that pertains to the SPR, including the accompanying chart. If you like what you see, we recommend a trial of TLR’s offerings. They will cancel your subscription(s) if you opt to discontinue. (By way of disclosure, I have not been paid in any form for this endorsement.)
In their introduction to the July 15 issue, Philippa and Doug point to a critical impact of a protracted Middle East war:
If [the Middle East] war lingers, pressure on the Strategic Petroleum Reserve, whose stocks are at record lows and whose infrastructure is fraying, will mount.
TLR’s discussion of the SPR is excerpted below:
thin reserves
To counter the price pressures coming from the war on Iran, the Trump administration released lots of oil from the Strategic Petroleum Reserve (SPR). In February, just before the war began, the SPR held 415.4 million barrels of crude; as of the beginning of July, that was down to 319.5 million barrels, a decline of 96.0 million, or 23%. Expressed as days of oil consumption, the reserve went from 19.8 days to 15.6.
Not that the SPR was brimming over to start with; Biden tapped into it heavily as well. February’s reserve of 19.8 days was starkly lower than the 1991–2019 average of 33.3 days. [Graph follows.] Weekly consumption numbers begin in 1991; SPR levels, in 1982.) With the brief collapse in oil consumption in the early pandemic months, the duration of the reserve soared, but that didn’t last long. Stocks began running down in late 2020, declining by 47% between June 2020 and July 2023. They rose 20% from then until February of this year, before taking the war hit. Even that recent high wasn’t impressive by historical standards—the absolute level was just 65% of the 1991–2019 average, and 59% of that period average expressed in days of consumption. And the actual reserve situation may be tighter than the raw numbers suggest. The SPR is, like much of the US infrastructure, in poor shape. “[F]requent drawdowns, wear-and-tear and a lack of investments are straining the reserve,” the Wall Street Journal reported the other day. “DOE officials recently told the Government Accountability Office that they are holding the reserve together with ‘Band-Aids,’ and that it is uncertain how long they will hold,” as the Journal put it.
Thank you, Philippa and Doug.
My View
With an interruption in peace talks and with hostilities intensified, another gasoline/energy price spike was inevitable. As my friend Peter Boockvar recently wrote, “Nothing angers a populace like a deterioration in the purchasing power of one’s currency and the coincident inflation running above the growth in one’s wages.” (The Boock Report, July 22nd)
I’m old enough to remember the 1970s oil price shock. Cumberland Advisors was founded in 1973 and commenced business operations right before the Middle East War. The oil price spikes had three phases and lasted around eight years. Then the oil price went up 10-fold (from about $3 a barrel to about $30). Fortunately, we are much less dependent on foreign oil now than we were then. Unfortunately, however, the Biden-Harris administration and the Trump-Vance administration each followed the same deceptive playbook — run down the SPR so the public won’t see the true cost in the gasoline price. That game is now about over.
Markets are saying the oil price is going to be higher for longer. Any relief from more Venezuelan crude flowing to a Corpus Christi refinery is many months (years?) away. How high will oil prices go? Nobody knows. Is any relief coming? Not likely now that we witness Houthi attacks on tankers and the Houthi attempt to blockade Saudi Arabia. The Hormuz War has expanded to a second front we can label the Red Sea War. Two fronts. Two choke points. Oil prices rise in response. Let’s not be fooled. The IRGC is playing Trump for time, knowing this is an election year.
Gasoline has the most widely observed price in the United States. Nearly everybody sees gasoline prices almost every day. And the math is straightforward. A single penny increase in the price for a gallon of gas amounts to about $1.8 billion annually as an after-tax cost imposed on the United States. In NY, if you ride the subway, the cost is negligible. In Montana, if you drive 100 miles a day to work and back, the cost is a meaningful impact on your household budget. And then there are the knock-on impacts to the price of all goods that must be produced and transported using now more expensive fuel.
Are financial markets prepared for an energy price shock? We may soon find out. Will it be prolonged, as it was in the 1970s? I doubt it. But could it last for one or two years? The answer is yes.
The rest of the world has been moving away from oil dependency. Trump, however, reversed US policy with his “Drill, Baby Drill.” American oil and gas production reached an all-time high. But he has also eroded US energy resilience by attacking alternative sources of energy like wind or solar while trying to reinstate coal. The nuclear effort is slowly happening and takes years.
An energy shock is coming. It will trigger more inflation. It will make Warsh’s task more difficult. And inflation is likely to exceed wage growth for months and months. Peter Boockvar is right. Americans won’t like it.
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