US Strategic Oil Reserves Hit Four-Decade Low as Crude Prices Continue to Fall

The United States' strategic petroleum reserves have fallen to their lowest level in more than four decades, yet global crude oil prices continue to decline despite tightening supplies and ongoing geopolitical tensions.

According to a Reuters report, the latest data from the U.S. Department of Energy shows that the country's Strategic Petroleum Reserve (SPR) has dropped by another 5.5 million barrels, bringing total holdings down to 325.7 million barrels—the lowest level since May 1983.

The drawdown is part of a broader plan to release 172 million barrels from the SPR following the Iran conflict, aimed at easing global supply shortages and stabilizing energy prices.

In addition to the strategic reserve, U.S. commercial crude inventories have also declined sharply in recent weeks due to strong exports and increased refinery demand.

Since the conflict began in late February, combined commercial and strategic crude oil inventories have fallen by 111.4 million barrels, leaving total U.S. oil stocks at 743.3 million barrels as of June 19, the lowest level since 1984.

Despite the significant decline in inventories, international crude prices have continued to weaken.

On Tuesday, global oil prices fell further, signaling a second consecutive monthly decline.

Brent crude for August delivery dropped 0.9 percent to $72.51 per barrel, about 22 percent lower than its closing price at the end of the previous month.

Meanwhile, U.S. West Texas Intermediate (WTI) crude fell 0.6 percent to $70.36 per barrel, representing a decline of nearly 19 percent compared with the end of May.

Market analysts attribute the price weakness primarily to growing expectations that geopolitical tensions in the Middle East may ease.

Investors are closely watching the possibility of indirect discussions between the United States and Iran in Doha, Qatar, as well as signs that oil shipments through the Strait of Hormuz could continue without major disruptions.

Tim Waterer, Chief Market Analyst at KCM Trade, said investors remain cautious but are awaiting clearer evidence that regional tensions are beginning to subside.

Meanwhile, Iran has announced plans to begin discussions with Oman regarding shipping routes through the Strait of Hormuz. However, Tehran has also clarified that there are no immediate plans for formal talks with the United States in the coming days.

At the same time, concerns over weakening demand in China, the world's largest crude oil importer, continue to weigh on the market. Analysts say the absence of a clear recovery in Chinese oil imports is adding further downward pressure on global crude prices.

Despite renewed military tensions and recent attacks on commercial vessels, Middle Eastern producers have continued exporting both crude oil and liquefied natural gas (LNG). Shipping activity through the Strait of Hormuz reached its highest level since the outbreak of the conflict last week, suggesting that energy flows remain largely uninterrupted.