In 1973 members of the Organization of Arab Petroleum Exporting Countries – including Iran, Iraq, Kuwait, Qatar and Saudi Arabia – refused to export oil to the US because the US supported Israel in the 1973 Arab-Israeli War. The war lasted for about 3 weeks in the month of October before it ended. However, though the war ended, the embargo lasted until March 1974 causing oil prices to quadruple worldwide from about $3 to nearly $12 per barrel. Pictures of cars queuing up in the affected nations became a global icon of the oil crisis. In hindsight of this crisis, US politicians proposed the idea of oil stockpiles. The US Congress passed the Energy Policy and Conservation Act in 1975. It established the Strategic Petroleum Reserve in the event of another major supply problem.
At present, there are four oil reserve sites:
Each site has several man-made salt caverns up to a 3,300 feet underground where the oil is stored. This is far cheaper than keeping it in tanks above ground as well as safer. The chemical composition of the salt and the geological pressure prevents any oil from leaking out.
The largest site at Bryan Mound near Freeport has a storage capacity equivalent to 254 million barrels of oil.
According to the reserve’s website, As of the 13th of September, 2019, there were 644.8 million barrels of oil held in these caves. The US Energy Information Administration reported that Americans used 20.5 million barrels of petroleum a day on average in 2018. This means that there’s enough oil to keep the country going for about 31 days.
Under the 1975 law signed by Gerald Ford, only the president can authorize the release of oil reserves if there is a “severe energy supply interruption”. However, there are also physical constraints that restrict the oil from being released. Only a small amount of oil can be moved from the caves each day due to geographical restraints, meaning even if there is presidential authority to release oil it would take nearly two weeks to hit the markets. Moreover, the oil is all unrefined. It would need to be processed into fuel before it would be useful for cars, ships and airplanes.