America's Strategic Petroleum Reserve or SPR has reached its lowest level in almost 40 years. According to US Energy Department data, the stock of crude oil in reserve has gone below 300 million barrels.
After increasing pressure on global oil supply due to Iran war, America has withdrawn a large amount of oil from its strategic reserves to maintain supply in the market. Now the decreasing level of reserves is raising questions about America's preparedness in any future energy emergency.
According to the report, after the Iran war, America has extracted about 172 million barrels of oil from its SPR. If the pace of extraction continues like this, then about 243 million barrels of oil may be left in the reserve.
This is the reason why the debate regarding America's Strategic Oil Reserve has intensified. The question is that if the supply crisis continues for a long time, for how long will America be able to support the market with its reserves.
172 million barrels of oil were extracted
Pressure on global oil supply increased after the Iran war. To deal with this situation, America continuously extracted oil from its Strategic Petroleum Reserve. So far, it has come to light that about 172 million barrels of oil has been extracted.
The effect of continuous withdrawal is clearly visible on the existing stock of reserves. SPR level has now reached below 300 million barrels. This has increased concerns about the amount of strategic oil available to the US to deal with any major supply shock in the future.
Oil reserve is kept in 60 salt caves
America's Strategic Petroleum Reserve is not like a normal oil storage tank. Its crude oil is kept in about 60 salt caves built thousands of feet below the ground in the Gulf Coast area of ​​Louisiana and Texas.
Arrangements have been made to preserve oil in these underground salt caverns. Water is poured into the caves when needed. Crude oil comes up due to water pressure and then it is taken out through pipeline and transported to the market.
Debate also regarding 70 million barrels
The US Department of Energy says that to operate these caves safely, an oil level of at least 70 million barrels is necessary.
However, experts have different opinions regarding this minimum limit. Amos Hochstein, a senior energy advisor to former President Joe Biden, believes that taking the SPR to 70 million barrels could be extremely risky. According to him, after reaching such a low level, it will not be easy to bring the reserve back to its previous level.
Experts said 250-300 million barrels are important
According to Texas A&M University petroleum engineering professor Siddharth Mishra, about 70 million barrels of crude oil may be required to safely keep the pipes immersed in oil in the upper part of the caves.
However, according to him, this minimum limit alone is not sufficient. He says that the practical operational floor of SPR should be between 250 to 300 million barrels. With the current stock reaching around this level, pressure may increase regarding the operational capacity of the reserve and the safety of the caves.
US Energy Department termed the danger wrong
However, the US Department of Energy has termed the fear of weakening or collapse of the SPR caves as wrong. According to department spokesman Ben Dieterditch, the caves are always full and changes occur mainly in the ratio of oil and water.
The Department of Energy says that the Trump administration is responsibly managing the SPR as an important strategic asset for America's national security.
What will happen next?
Now the biggest question is how long will the Iran war and pressure on global oil supply continue. If America has to continuously extract oil from its SPR, the reserve level may go down further.
In such a situation, the challenge will not be limited to the current quantity of oil only. If America faces a new energy emergency in the future, then the more important question will be how quickly it will have the ability to deliver oil to the market.
That is, for America, the decreasing level of SPR is not just a stock figure, but it has also become a matter related to its energy security and ability to deal with future oil supply crisis.
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