US emergency oil reserve holds at 283m barrels as new sales loom

The United States Strategic Petroleum Reserve (SPR) stayed flat last week at 283 million barrels as of October 9, matching the level a week earlier, according to data released on Tuesday by the Department of Energy. That is the lowest reading since October 1982, and about 13 million barrels away from the first reading on record in August of that year, when the reserve was coming online under President Reagan.

The steady week may not last. The Trump administration announced on Saturday it plans to sell up to 4 million barrels of crude in response to Hurricane Isaias, on top of sales already lined up over Middle East supply disruptions.

Hurricane Isaias triggers 4m barrel exchange

Hurricane Isaias left four people dead and more than 650,000 without power after making landfall in Florida last week. The administration said the 4 million barrels would be sold "to address supply disruptions due to inclement weather in the Gulf of America," its preferred name for the Gulf of Mexico.

The deal is structured as an exchange rather than an outright sale. Companies that take the crude are expected to return it "with additional premium barrels" in 2027. Even so, it drains the reserve in the immediate term. Withdrawals tied to hurricanes are routine in the US system.

Iran war sales add to the drawdown

The hurricane exchange runs alongside a separate push to complete withdrawals promised earlier this year to bolster energy markets upended by the war in Iran. The Department of Energy recently announced a request for bids to sell 40 million barrels in the coming months as part of that effort.

Together, the two tracks point to a reserve that keeps shrinking before any replacement barrels arrive.

Democrats question the caverns

Falling stockpiles are turning into a political issue. Senator Martin Heinrich of New Mexico, a Democrat, asked about the "structural integrity" of the depleted salt caverns that hold the crude.

"I am deeply concerned by reports that recent drawdowns of the SPR could damage the salt caverns that hold millions of barrels of America's emergency crude," Heinrich wrote in a letter released Tuesday.

The administration has said for weeks that only 70 million barrels must remain in the reserve to manage the caverns safely. Some experts, including a prominent former Biden energy official, have questioned that assessment.

Heinrich added that the Energy Department had failed to respond substantively to previous queries. He said he would soon introduce legislation to mandate long-term planning for the SPR.

For Nigeria, the stakes are indirect but real. A reserve this close to historic lows leaves Washington with less room to cushion oil supply shocks. Any price spike that follows would lift Nigeria's crude earnings, but it would also raise the cost of refined fuel imports and pile pressure on the naira.