U.S. Strategic Petroleum Reserve Falls To Its Lowest Level In More Than Four Decades As Hormuz Strait Remains Closed

The Strategic Petroleum Reserve (SPR) fell to its lowest level in more than 40 years as the Strait of Hormuz remains largely closed.

Data from the Department of Energy showed that the SPR stood below 300 million barrels last week, the lowest since January 1983.

It was at about 415 million barrels before the war with Iran bean in late February and has a maximum authorized capacity of 714 million barrels.

The Trump administration had ordered the release of 172 million barrels in March as the war continued and the Strait of Hormuz remained closed.

A spokesperson for the DoE told CNBC that the minimum amount needed to operate the SPR is 70 million barrels.

Traffic through the waterway is not expected to fully reopen any time soon as Washington and Tehran's positions remain far apart.

President Donald Trump signaled a shift to economic, rather than military pressure on the country.

"We are low-keying it," Trump told Axios on Sunday. "We are only semi-negotiating with them. We are just watching Iran with its huge inflation and the fact they have no money."

The president went on to say that the country is in "very bad shape," claiming that the situation will "work out." "It always works out. It's like a chess game," he said.

Top U.S. officials had anticipated last week that a deal to reopen the key waterway was imminent. However, the announcement never came as Tehran rejected Washington was involved in talks and said it continued negotiating with Oman.

Over the weekend, Iran set out fresh conditions to reopen the waterway. The Supreme National Security Council's secretary, Mohammad Bagher Zolghadr, said conditions include an end of U.S. aggressive behavior, "including any threats to the country's national and religious sanctities."

A permanent end to the "war and aggression against Iran and its allies in Lebanon, Palestine, Yemen and Iraq" is another demand.

Apart from lifting the Naval blockade enforced by the US, Iran has also sought a withdrawal of the US naval and air forces from Iran's neighborhood.

A full compensation package "for damages caused by two wars of aggression and imposition," lifting of "unjust and illegal" sanctions and unconditional release of Iranian assets "that were blocked and stolen" completed the terms set by Iran.

Traffic through the waterway has slowed down to a trickle in the meantime. Only two vessels traveled through the waterway last Wednesday, according to intelligence firm Kpler. The figure was down from eight a day prior and stood between 130 and 140 a day before the war began in February.