WASHINGTON (Dispatches) -- The U.S. Strategic Petroleum Reserve has fallen below 300 million barrels for the first time since it was filled in the early 1980s, according to Department of Energy data released this week. 
The reserve now holds approximately 298.7 million barrels—a level last seen during the Reagan administration.
The precipitous decline stems from a 172-million-barrel release authorized by the Trump administration to counter severe supply disruptions caused by Iran’s effective closure of the Strait of Hormuz. When the current drawdown concludes, inventories will sit at roughly 243 million barrels.
To put this in perspective: before the Russia-Ukraine war in 2022, the SPR held about 582 million barrels. Even before the war on Iran began in late February, the reserve had been refilled to approximately 415 million barrels. Since then, inventories have dropped by 98.9 million barrels.
The crisis extends beyond mere numbers. The SPR’s crude is stored in 60 salt caverns thousands of feet underground across four sites along the Gulf Coast in Texas and Louisiana. To release oil, operators pump freshwater into the cavern floor to displace crude upward—a process that gradually dissolves salt walls with each drawdown.
Petroleum engineering experts are sounding alarms about permanent damage.
Siddharth Misra, a petroleum engineering professor at Texas A&M University, warned that repeated rapid drawdowns wash away salt walls, creating “flatter, less stable roof and severely thins the critical salt pillars that separate adjacent caverns, greatly increasing the geological risk of a structural cave-in”.
While the Energy Department maintains that 70 million barrels is the safe minimum to keep extraction pipes submerged in oil rather than water, Misra stated that “the practical operational floor for the crude inventory is between 250 million and 300 million barrels”. At current levels, “cavern integrity and overall operational capability are at an elevated risk”.
Below 300 million barrels, the SPR loses its ability to pump oil at rapid speeds needed to address emergencies, Misra explained. The system’s pipes and pumps could also suffer damage as the oil layer thins and sludge rises toward the extraction intake at the cavern ceiling.
Amos Hochstein, a senior energy advisor to President Joe Biden, bluntly dismissed the Energy Department’s claims.
“Don’t believe the people out of the government that are saying the SPR can go to 70 million barrels. It’s nonsense,” Hochstein told CNBC. At that level, the reserve would be depleted to “the point of never resurrecting it,” he said.
In June, Hochstein warned that reducing the reserve below 300 million barrels risked damaging the caverns. “I don’t know anyone who believes we can go below 300,” he said at an Atlantic Council event. “I know plenty of people who think we can’t get near 300 because physically you will damage the caverns where the oil is stored.” 
The Government Accountability Office has raised concerns. In a May 2026 report, the GAO found that while most caverns were in “very good condition” after the 2022 drawdown tied to Russia’s invasion of Ukraine, “repeated partial drawdowns followed by refill can leach a single part of a cavern repeatedly, leading to undesirable shapes”.
“However, every drawdown cycle expands cavern volume and reduces the spacing between caverns within the salt dome, which ultimately reduces their long-term viability,” the GAO stated. Energy Department officials told the GAO they are uncertain how long the infrastructure will hold together.
The war has already cost companies worldwide at least $25 billion—and the bill is climbing, according to a Reuters analysis of corporate statements from the U.S., Europe, and Asia. At least 279 publicly listed companies have explicitly cited the war as a trigger for price hikes, production cuts, dividend suspensions, or staff furloughs.
Airlines have been hit hardest, absorbing nearly $15 billion in losses as jet fuel prices nearly doubled.
Whirlpool CEO Marc Bitzer told analysts that “this level of industry decline is similar to what we have observed during the global financial crisis” after the company slashed its full-year forecast in half and suspended its dividend. Consumers are “holding back on replacing products and rather repairing them,” Bitzer said.
Other major corporate casualties include Toyota warning of a $4.3 billion profit hit, Procter & Gamble estimating a $1 billion post-tax impact, and Continental expecting a €100 million ($117 million) hit from raw material costs.
The Strait of Hormuz closure has disrupted more than oil. Approximately 30% of global seaborne fertilizer trade—and an estimated 20% of globally traded liquefied natural gas, a key feedstock for nitrogen fertilizer production—passes through the strait.
The impact on prices has been dramatic. Urea prices climbed above $920 per metric ton in April, an increase of roughly 80% since February, according to the World Bank. Bulk sulphur spot prices have more than tripled over the past year, rising from around $293 per ton in mid-May 2025 to $928 per ton by May 18, 2026.
Yara International Executive Vice President Hanna Opsahl-Ben Ammar warned that “the situation is putting significant pressure on the global food system”. 
“Fertilizers are fundamental to global food production—roughly half of global food production depends on them. Stable, affordable access is critical for farmers to produce the food the world needs.” 
In the United States, 70% of farmers surveyed by the American Farm Bureau Federation said fertilizer costs were so high they would not be able to buy all the fertilizer needed for the current season. Even if the conflict ended today, fertilizer markets would not return to normality before the end of 2026, according to IFPRI analysis.
The SPR was established in the 1970s following the Arab oil embargo to cushion the country against crude shortages and price shocks. At its maximum capacity of 714 million barrels, it represented a formidable buffer. Today, it holds less than half that amount.
Maximum drawdown capacity has already been affected. While the SPR is theoretically capable of releasing 4.4 million barrels per day, that capacity falls to roughly 1–1.4 million barrels per day when inventories are low due to reduced reservoir pressure.
The situation has not gone unnoticed in financial markets. Prediction markets have nudged up the odds of crude oil hitting a new all-time high by year-end from 10% to 12.5% over the past week. The reserve news, combined with tight global oil supplies, has been read as “a potential constraint on supply that could feed into crude price expectations”.
With the Strait of Hormuz remaining effectively closed and diplomatic efforts stalled, the SPR’s continued decline appears inevitable. The Energy Department will continue its drawdown for several more weeks, bringing inventories to the critical 243-million-barrel level.