Desperate Bessent! The strategic oil reserves that the United States can mobilize are running low!
Bessent claims that the United States can independently release its strategic petroleum reserves; however, Trump had previously announced the release of 172 million barrels, which would reduce the inventory to 244 million barrels, significantly below the statutory red line (252 million barrels). Additionally, the salt cavern engineering structure requires a minimum safety reserve of 150 to 160 million barrels, meaning that even if the statutory red line is breached, there would only be less than 90 million barrels of release space
U.S. Treasury Secretary Becerra claimed that the Strategic Petroleum Reserve (SPR) could be tapped again to suppress oil prices, but the reality is far more complex—the reserve is nearing its legal minimum, and the physical safety bottom line further limits the space for additional releases.
Becerra stated last week that the U.S. participated in the largest international coordinated SPR release action to date, totaling 400 million barrels, and warned that if necessary, the U.S. could unilaterally release reserves again to stabilize oil prices.
However, according to Bloomberg reports and publicly available data from the SPR website, the actual available space in the U.S. Strategic Petroleum Reserve is extremely limited. The buffer zone between the current reserve level and the legal minimum will be nearly exhausted after completing the announced release plan, while geological engineering constraints present a hard bottom line that is difficult to overcome.
Becerra's tough statements may reflect the increasing scarcity of policy options. Yesterday, Becerra also stated that Iranian oil has been allowed to continue flowing from the Gulf region and that sanctions on Iranian oil at sea may be lifted in the coming days.
Reserve Crisis: Legal Red Line is Within Reach
The U.S. Strategic Petroleum Reserve consists of underground salt caverns located in Louisiana and Texas, with a maximum designed capacity of approximately 715 million barrels, sufficient to meet over a month’s worth of U.S. oil consumption needs.
However, after multiple rounds of withdrawals, the reserve has significantly shrunk. According to data from the SPR website on March 13, there are currently about 155 million barrels of light crude oil and about 261 million barrels of heavy crude oil, totaling approximately 416 million barrels. This situation partly stems from the Biden administration's order to release 180 million barrels following the outbreak of the Russia-Ukraine conflict in 2022, with slow progress on replenishment thereafter.
The Trump administration has announced a release of 172 million barrels under an international coordination framework. Once this plan is executed, SPR inventory will drop to about 244 million barrels. The problem is that U.S. law clearly states that when the salt cavern reserves fall below 252 million barrels, the government cannot continue to draw from the reserves. In other words, after completing this round of releases, the inventory will directly fall below the legal minimum.
In theory, the government could declare an energy emergency or push Congress to amend relevant laws. However, critics point out that rising gasoline prices are unlikely to constitute a legally defined "serious energy shortage" crisis, and both paths face considerable resistance.
Physical Limits: Hard Constraints of Salt Cavern Structure, Release Space Only 80 to 90 Million Barrels
Even if legal obstacles could be circumvented, the physical constraints at the engineering level cannot be ignored and are far more difficult to address than legislative procedures.
According to previous Bloomberg reports, this salt cavern system, built in the 1970s, was originally designed with a lifespan of only 25 years and could only withstand five complete injection and withdrawal cycles. Former SPR project manager William "Hoot" Gibson stated that the more frequently the system is used, the greater the risk of salt cavern dissolution and collapse According to statistics from Bloomberg's Alphaville, since the establishment of the SPR in 1977, it has undergone its ninth use, far exceeding its original design capacity. This means that a certain minimum oil volume must be maintained in the salt caverns to prevent structural damage.
JP Morgan's energy analysts pointed out last week that the SPR has an actual operational safety bottom line of about 150 million to 160 million barrels; falling below this level would jeopardize the stability of the salt caverns and the operational flexibility of the system, which also includes a portion of "roof oil" that cannot be extracted.
Considering these two constraints, the actual space that Besant can mobilize is extremely limited.
After completing the current release of 172 million barrels, the SPR inventory will drop to about 244 million barrels, already below the statutory lower limit of 252 million barrels. JP Morgan estimates the physical safety bottom line to be around 150 million to 160 million barrels.
The difference between the two—i.e., the theoretically additional release capacity—is only about 80 million to 90 million barrels, and this figure is based on the premise of declaring a state of emergency or completing legislative amendments.
More importantly, if reserve levels approach the physical safety bottom line, market concerns about the depletion of reserves may actually exacerbate oil price volatility, contrary to the original intention of stabilizing prices. As historical experience shows, the closer policy tools are to their limits, the more their signaling effects tend to backfire—revealing more desperation than control
