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Opinion
Javier Blas

The US Is Depleting Its Strategic Petroleum Reserve Faster Than It Looks

The composition of the US crude cache will be the next key development for energy markets.

Provider of the barrel of last resort — but for how long?

Provider of the barrel of last resort — but for how long?

Photographer: Luke Sharrett
Corrected

The US has become the world's oil barrel of last resort, single handedly keeping prices in the energy market from exploding even higher by selling a large chunk of its Strategic Petroleum Reserve. Washington can’t use the reserve forever: it’s a finite stockpile fighting a potentially unlimited flow shortage. More worryingly, the US is depleting its cache a lot faster than it looks.

And that matters. The International Energy Agency earlier this week warned that “global oil supply may struggle to keep pace with demand next year.” The SPR may be the final cushion late this year and in 2023 to put a lid on oil prices — and global inflation. What Federal Reserve Chair Jerome Powell and his peers around the world do with interest rates hinges in large part on energy market developments.