U.S. oil inventories hit a 22-year low as exports drain stockpiles

The United States is exporting more oil than ever, but it's not because the country is producing more. Instead, the barrels are being pulled straight out of storage — and the Energy Information Administration reported this week that U.S. petroleum inventories have fallen to their lowest level since 2004. Analysts expect them to reach record lows if the current pace continues, and the situation is fundamentally different from the last time inventories got this thin: back in the mid-2000s, the U.S. was nowhere close to exporting the millions of barrels a day it ships overseas now.

Patrick DeHaan, head of petroleum analysis at Gas Buddy, explained the bind. "It's really easy to say, well, we can just stop that. Well, we really can't." If the U.S. stopped exporting, oil companies would largely stop drilling — there simply isn't enough financial incentive to invest billions of dollars for a limited domestic return. The U.S. is exporting to make up for missing Persian Gulf supply, and the Trump administration has been drawing down the Strategic Petroleum Reserve to keep prices in check. But the U.S. "can continue to be a backstop just through inventories for too much longer," the report noted. Even if the war in Ukraine were to end today, the U.S. would likely keep drawing down stockpiles for months. If the war co