Goldman Sachs has reported that the United States’ emergency oil stockpile, known as the Strategic Petroleum Reserve (SPR), has dropped to a 40-year low. This decline is limiting the US government’s ability to shield consumers from the effects of Saudi Arabia’s significant supply cuts. According to Daan Struyven, head of oil research at Goldman Sachs, this situation has left US energy policy with fewer options.
The low oil reserves contribute to the expectation that oil prices will remain high, with a projected average of $100 per barrel in the near future. This could further increase gasoline prices and worsen inflation, potentially impacting the 2024 US presidential race. The SPR, designed as a rainy-day fund, has decreased by approximately 270 million barrels over the past two years, reaching its lowest level since August 1983.