VI Energy Politics & Supply Security
Strategic Petroleum Reserve
An emergency stock of crude a state holds underground to release during a supply disruption; the US reserve is the world's largest.
How it works
The US Department of Energy describes the Strategic Petroleum Reserve (SPR) as the world's largest emergency crude oil stockpile. Its authorised storage capacity is 714 million barrels, held in salt caverns at four sites along the Gulf of Mexico coast.
Oil leaves the reserve by three routes. Emergency sales are ordered by the president; the department says this route has been used four times. In an exchange, oil is lent to companies and returned later as a larger number of barrels. Sales mandated by law are also made to raise budget revenue.
The measurement trap is that the barrel count alone does not describe the buffer. How much oil can leave the reserve each day depends on pipeline and terminal capacity, which the department puts at about 2.6 million barrels a day. Fill level and drawdown rate should be read together.
Why it matters here
How far a supply shock feeds into prices depends as much on the thickness of the buffer as on production. Once the reserve has been drawn down, the same cushion is not there for a second disruption. SPR fill levels therefore show how sharply a new outage at a chokepoint such as Hormuz would pass through to prices. The joint stockholding commitments of IEA countries are read the same way.