Canada keeps no strategic stockpile, leaving its oil sands to carry the load
US emergency crude stockpiles have fallen below 300m barrels for the first time in more than four decades, thinning the world's supply cushion as war between the United States and Iran keeps oil crawling through the Strait of Hormuz.
The Strategic Petroleum Reserve dropped by 6.1m barrels to 298.7m barrels over the past week, according to Department of Energy data released Monday and reported by CNBC.
Created in 1975, the reserve now sits at its lowest level since January 1983.
Prices climbed alongside the drawdown.
Brent crude, the global benchmark, rose 4 percent Monday to about US$87 a barrel, roughly 16 percent above its pre-war level, The New York Times reported, while West Texas Intermediate traded just above US$81.
The decline traces to March, when US President Donald Trump ordered the release of 172m barrels after Iran choked off exports through the strait.
The SPR held around 415m barrels before the US and Israel struck Iran on Feb 28, CNBC noted, and Washington's stocks will slide to roughly 243m barrels once the ordered release finishes.
That trajectory has raised questions about how close the reserve is to depletion.
Its authorized capacity is 714m barrels, and the minimum needed to operate it safely is about 70m barrels, an Energy Department spokesperson told CNBC in July.
David Goldwyn, a former State Department special envoy under former President Barack Obama, played down the risk.
"I'm not worried about the stability of the reserve or our ability to do another drawdown, if we needed to," he told the outlet.
Aging infrastructure complicates that view.
A May Government Accountability Office report found more than a quarter of the reserve's inventory was "not available for drawdown due to a combination of construction outages and cavern outages" as of December 2025, implying at least 103m idle barrels, per a July analysis by Rapidan Energy.
Each release compounds the wear, Goldwyn added: "When you do a drawdown, then you accelerate kind of the degradation of the wells themselves and some of the equipment."
For Canadian portfolios, the sharper gap is domestic.
Canada holds no strategic reserve, the only G7 nation without one, since its status as a net exporter exempts it from the International Energy Agency rule requiring 90 days of stockpiled imports, the Canadian Press has reported.
The country needs none, federal energy minister Tim Hodgson told the Globe and Mail, calling the oil sands "the best strategic reserve in the world."
Even so, there is little slack, with the Trans Mountain pipeline running near 90 percent capacity and steep tolls capping extra flows to Asia, according to the Canadian Press.
The war has reshaped Canadian pricing.
Western Canadian Select for September delivery settled about US$14.80 a barrel below WTI in early August, its widest discount in months, brokerage CalRock reported, after prices fell on hopes of a diplomatic resolution.
The strait's closure has nonetheless deepened a shortage of heavy, sour crude in Asia, lifting demand for barrels shipped from the BC coast.
That pull is feeding policy.
Ottawa moved on Aug 1 to designate a proposed 1,250-kilometre Alberta-to-BC pipeline, capable of up to 1m barrels a day, as a "national interest" project, setting a Sept 18 comment deadline, the Canadian Press reported.
NDP Leader Avi Lewis called it "corporate welfare on a surreal scale" in a statement, while the Union of British Columbia Indian Chiefs, in a letter, urged Prime Minister Mark Carney to halt it.
A resolution still looks distant.
Iran and Oman have signalled they are near a deal, the Times reported, but Tehran has attached a long list of demands, and Trump told Axios on Sunday he expects economic pressure to force its hand.
