Deep in the giant underground salt caverns of Louisiana and Texas, the U.S. government stores hundreds of millions of barrels of crude oil.
The Strategic Petroleum Reserve is a special government oil stockpile that eventually gets refined into the things people rely on, like gasoline and diesel.
But now the reserve is low, threatening one of the few government levers to ease high gasoline prices.
Since the U.S. and Israel went to war with Iran in late February causing an oil shipping logjam, the Trump administration has tapped into the stockpile multiple times in an effort to boost the country's fuel supplies.
Gas prices are still high, diesel is at a record high, and the reserve has shrunk more than 30% in six months. While the reserve held around 415 million barrels of oil in February, it now holds less than 285 million barrels of oil — lower than it has been since the early 1980s.
These rapid drawdowns of oil threaten the salt caverns' structure, says Samantha Gross, director of the energy security and climate initiative at the Brookings Institution, a nonpartisan policy think tank. As the reserves get lower and lower, the physical facilities can get degraded, Gross says: " You can damage them by pumping too much out of them."
And there's an economic risk, too, as the war with Iran drags on, says Ben Cahill, who covers the global energy sector as a non-resident senior fellow at the Atlantic Council, a nonpartisan think tank. Before the war, global oil stockpiles were high and there was lots of oil on ships across the world's oceans. Now that oil has been mostly used up. Should the U.S. want to replenish its reserves, there's a lot less to go around, he says. Brent crude, the global benchmark, remains over $100 a barrel — 47% higher than when the war began.
The Trump administration is now in a weaker position to use the Strategic Petroleum Reserve to lower gasoline prices, Cahill says. It's already made a few other moves to drive down prices, including temporarily waiving the Jones Act to make it easier for ships to move fuel to U.S. ports, and allowing gasoline producers to start selling their "winter blends" — which are cheaper to make — a little earlier this year.
" A lot of the things that got us through the last six months, all those buffers, have really been worn away," Cahill says.
Can an oil deal with Venezuela refill the reserves?
In late August, the Trump administration announced it was entering a partnership with an oil company in Venezuela allowing the federal government a majority stake in 17 Venezuelan oil fields. In an online statement, the White House said the new deal would ensure "a stable supply of low-cost oil that can facilitate refilling the Strategic Petroleum Reserve."
A few days after the White House announced the new deal, U.S. Secretary of Energy Chris Wright clarified that the plan was not to fill up the U.S. reserve with a bunch of Venezuelan crude oil. Rather, he suggested during an interview with CNBC, the U.S. might exchange U.S. barrels for Venezuelan ones.
That's because not all crude oil is the same — some is physically lighter or heavier and sulphur levels vary. Much of Venezuela's oil is heavy and dense, with a lot of sulphur, says Gross, of the Brookings Institution.
"It's this heavy, goopy, thicker than molasses stuff," she says, "That's not necessarily what you want to put in these caverns."
Much of the oil in the U.S. strategic reserves is lighter, with medium or light levels of sulphur, says Carl Larry, a manager at Enverus, an energy data and research provider. Lighter crude, Larry says, is easier for producing gasoline and diesel than heavier crude.
On CNBC, Wright said as part of the deal the U.S. could swap different grades of oil: "We'll swap you a barrel of heavy crude for a barrel of light or medium United States crude."
But even if the U.S. wants to do a swap for Venezuelan oil, much of the new production won't happen anytime soon. Some of the 17 oil fields under discussion in the U.S. deal in Venezuela are new, and will need to be developed from scratch, says Jorge León, head of geopolitical analysis at research firm Rystad Energy. Others, he says, will need re-investment and redevelopment.
"You need to literally make the holes on the ground and insert cement and piping and build all the infrastructure," León continued.
Some oil fields are so far away from infrastructure that they will take over a decade for oil to start flowing, says Francisco Monaldi, director of the Latin American Energy Program at the Baker Institute at Rice University. "I wouldn't say 'never,' but say 10 to 20 years," he says.
Much of the oil under discussion in the U.S. deal is the so-called Faja Venezuelan oil; it's thick like peanut butter and will be difficult to extract. The oil company that the U.S. is partnering with in Venezuela is Barbados-headquartered North American Blue Energy Partners (NABEP).
In an email to NPR, the company said, "The NABEP team is deeply familiar with the unique challenges of oil production in Venezuela. Our engineering team is led by local industry professionals with decades of experience, including in our PetroCedeno and Junín Sur fields in the Faja. This team's track-record is clear, having already increased production in NABEP's existing assets tenfold over the past two years."
Lessons from China
Ultimately, the U.S. can learn something about how to handle their strategic reserves from China, says Antoine Halff, non-resident fellow at Columbia University and an expert on oil markets.
China, which has the largest oil stockpiles in the world, has dipped into its reserves since the Iran war began in February, Halff says. But China is drawing from it less because of the nation's growing fleet of electric cars, trucks and scooters. Electric transport is already displacing demand for at least 1.5 million barrels of oil a day in China, according to the International Energy Agency.
"To manage market disruption risks, China shows it pays to have a multi-pronged approach," Halff says in an email.
Meanwhile, the Trump administration has reversed federal policies that promoted or encouraged electric vehicles; for example, last year it scrapped a federal tax credit worth up to $7,500 for buying or leasing a new EV.
Ultimately, some energy experts say the solution to a healthy reserve might not only be the ability to quickly replenish supply — it might also be shrinking demand.
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