Crude oil tops $100 a barrel as U.S. strategic petroleum reserves hit lowest level since 1983

WICHITA, Kan. (KWCH) — Crude oil prices surged past $100 a barrel as the war with Iran intensifies, and America’s Strategic Petroleum Reserve has fallen to its lowest level since 1983.

More than 400 million barrels of oil reserves were on hand in the weeks before the war with Iran began. Since then, the reserve has dropped to its lowest point in more than four decades.

What the Strategic Petroleum Reserve is

The Strategic Petroleum Reserve was created in 1975 in response to Iranian oil embargoes.

Richard Gearhart, a professor of economics at Cal State Bakersfield, said the reserve was designed as a safeguard against economic disruption.

“It’s essentially meant as a buffer. It’s meant to be used to protect America during wars or oil shocks, those sorts of things,” Gearhart said.

He said the reserve’s origins are tied directly to the relationship between oil and the broader U.S. economy.

“It was created because every modern recession in the United States has been preceded by some shock in the oil industry, usually external,” Gearhart said.

Gas prices in Wichita

Gas prices in Wichita are up 73 cents compared to the same time a year ago, nearly six months into the war with Iran. Gearhart said the reserve releases have helped keep prices from climbing further.

“If we hadn’t released barrels from the Strategic Petroleum Reserve, the price per gallon of gasoline would probably be between $5 and $6 per gallon right now. And that would just be untenable,” he said.

No relief in sight

Shawn Steward with AAA Kansas said there is no indicator the market will cool in the near term.

“Until we get some resolution on these geopolitical issues, these conflicts around the world, it’s safe to say that our gas prices are not going to come down significantly for a long period of time,” Steward said.

Both Steward and Gearhart also pointed to Russia’s war in Ukraine, where Russian refineries are often targets, as another factor contributing to elevated fuel prices.

Congressional gridlock a concern

Gearhart said congressional gridlock is limiting action on the reserve.

“I think they’re probably much more focused on trying to pass a budget for the 19th time or trying to do anything with the amount of gridlock we’re seeing in the most unproductive congressional session in our history, at least since 1913. So, I don’t think it’s a priority right now, but I do think it is… we should be talking about it,” Gearhart said.

Gearhart said he does not believe there is an impending disaster with the Strategic Petroleum Reserve at this time, but said time is a factor in replenishing the reserves — particularly as the war with Iran continues.