US Oil Inventories Plunge 7.2 Million Barrels Amid Geopolitical Tensions, EIA Reports

US commercial crude oil stockpiles dropped by 7.2 million barrels in the week ended July 24, far exceeding market expectations, as refineries ramped up processing and exports climbed, the US Energy Information Administration (EIA) reported on July 30, 2026.

Analysts polled had forecast a drawdown of only 1.3 million barrels, making the actual decline more than five times larger than anticipated. The sizeable miss underscores how tightly balanced the global oil market has become, with supply buffers narrowing even as demand remains firm.

Inventory Levels Hit Multi-Year Lows

Crude inventories, excluding the Strategic Petroleum Reserve (SPR), fell to 404.5 million barrels — the lowest level since 2018. Total oil stocks, including the SPR, decreased by 11 million barrels to 712.2 million barrels, marking the lowest combined level since 1984.

The SPR, the world's largest emergency petroleum reserve maintained by the US government, is stored in underground salt caverns along the Gulf Coast. The reserve has been drawn down significantly over recent years through emergency releases and congressionally mandated sales, leaving the US with less fiscal ammunition to cushion future supply disruptions.

Inventories at the Cushing, Oklahoma delivery hub — the designated storage and pricing point for West Texas Intermediate (WTI) crude futures traded on the New York Mercantile Exchange (NYMEX) — declined by 771,000 barrels to 18.6 million barrels. This represents the lowest level at Cushing since 2014 and places inventories below the 20 million barrel operating threshold. When Cushing stocks approach minimum operating levels, market participants closely watch for signs of logistical strain, as adequate inventories are needed to support the physical delivery mechanism underpinning WTI futures contracts.

Oil Prices Rally on Report

Oil prices rose sharply following the report's release. Brent crude, the international benchmark, traded $6.34, or 7.5%, higher at $90.42 per barrel as of 10:47 a.m. ET. West Texas Intermediate crude, the US benchmark, climbed $5.90, or 7.5%, to $85.22 per barrel. The drawdown's magnitude — coming amid ongoing geopolitical risk — amplified the market reaction, as traders weighed already thin commercial stockpiles against potential supply disruption scenarios.

Refinery Activity and Trade Flows

Refinery crude runs increased by 271,000 barrels per day (bpd) last week. Refinery utilization rates rose by 1.1 percentage points to 97.2%, indicating that nearly all available domestic refining capacity was in operation. The high utilization reflects seasonal peak demand during the US summer driving season, when gasoline consumption typically reaches its annual high and refineries maximize throughput to build inventories ahead of late-summer travel.

US crude exports edged higher to 3.5 million bpd. Net US crude imports — total imports minus exports — fell by 237,000 bpd. Robust export levels reflect continued overseas demand for US light sweet crude, particularly from European and Asian refiners seeking alternatives in a reallocating global supply landscape.

Source: Investing.com