United States commercial crude oil inventories fell to 408.4 million barrels in the week to 26 June, the lowest level since September 2018, the Energy Information Administration reported. The 3.8-million-barrel draw, though smaller than some analysts had forecast, was driven by refinery throughput rising to 96.6 percent of capacity and crude intake climbing 85,000 barrels per day. Gasoline stocks dropped a sharper-than-expected 2.3 million barrels to 214 million, reflecting pre-holiday demand ahead of the 4 July weekend, while distillate inventories surprised with a 2.5-million-barrel build. At the Cushing delivery hub, stocks edged up 709,000 barrels after nine consecutive weeks below the operational minimum of roughly 20 million barrels.

Viewed from Washington, the inventory picture is compounded by the continued erosion of the Strategic Petroleum Reserve. The SPR shed 5.5 million barrels to 325.7 million, a low not seen since May 1983. A Government Accountability Office investigation, cited by Russian state media, found that more than a quarter of the reserve’s oil is now inaccessible because of equipment failures and deformed storage caverns, reducing effective pumping capacity to 61 percent of design levels. The degradation follows the largest emergency release in US history—180 million barrels in 2022 after the invasion of Ukraine—and a further 172-million-barrel draw linked to the conflict with Iran, according to the same report. Repair costs are estimated at $230 million.

In global markets, Brent crude futures fell 1.6 percent and US benchmark contracts were little changed, as fears of a supply disruption eased. Russian outlets highlighted a US–Iran agreement that includes the opening of the Strait of Hormuz, Iran’s waiver of transit fees for foreign vessels, and the lifting of the US blockade on Iranian ports. The deal, they reported, removed a key risk premium from prices. Meanwhile, President Trump publicly urged fuel retailers to cut pump prices immediately, warning of “big problems” and setting a target of $2.50 per gallon, well below the national average of $3.85.

Congressional Republicans have moved to constrain the president’s authority over the SPR, passing House legislation that would require an increase in domestic drilling before further releases and ban sales to China. The Senate, controlled by Democrats, has not taken up the measures. The Department of Energy has signalled it will resume replenishing the reserve when West Texas Intermediate crude trades in a $67–72 per barrel range or lower. With refinery utilisation near maximum and the summer driving season under way, the next indicator of market balance will be whether gasoline demand holds at the elevated 9.13 million barrels per day recorded last week.