The United States’ Strategic Petroleum Reserve (SPR) has dropped to its lowest level in four decades, according to Goldman Sachs analyst Daan Struyven. As of Thursday, the SPR had lost approximately 270 million barrels since August 1983, a decrease that Struyven flagged as potentially concerning for the nation’s energy security.
This significant depletion of reserves comes in the wake of President Biden’s administration tapping into the Gulf Coast SPR earlier this year. Amid escalating conflict in Ukraine, the administration released emergency oil stocks in an effort to cushion consumers from soaring gasoline prices. The prices had reached a peak of $5.02 a gallon in June 2022.
Despite these countermeasures, Struyven anticipates that oil prices will remain elevated due to aggressive supply cuts by Saudi Arabia. He predicts that oil prices could hover around $100 a barrel next year. This sustained high price could further fuel inflation and potentially influence the outcome of the 2024 White House race.
The SPR’s plunge to a 40-year low highlights the delicate balance between managing domestic energy needs and navigating geopolitical tensions. With oil prices expected to remain high into next year, the state of the SPR is likely to remain a critical focus for both policymakers and market watchers.
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