U.S. Crude Oil Inventories Reduced as Middle East War Resumes

Written by Daniel Graeber for IIR News Intelligence (Sugar Land, Texas)

Summary

Inventories are being reduced and legacy exporters in the Middle East are unable to deliver as tensions escalate in the Persian Gulf region.

U.S. Inventories Below Five-Year Average

U.S. oil inventories are heavily depleted as supplies are again tested by war, data show.

Crude oil supplies are at a premium now that war has intensified in the Middle East. June was a period of relief that came as a result of a memorandum of understanding between Iran and the United States to end a conflict that began in February. That deal ensured safe passage through the Strait of Hormuz.

But that deal fell through after U.S. President Donald Trump told Congress that war would resume in the wake of continued hostilities in the strait. On Wednesday, the U.S. military said it resumed a naval blockade for vessels trying to reach Iran.

On Thursday, the price of Brent crude oil, the global benchmark, was trading at around $85 per barrel. That's nearly $10 per barrel more than the close of trading on Friday.

In its weekly petroleum status report, the Energy Information Administration, part of the U.S. Department of Energy, reported no imports from Iraq or Saudi Arabia.

At this time last year, Saudi Arabia was the No. 4 crude oil supplier to the U.S. economy, with 244,000 barrels per day (bpd) delivered on average, while Iraq was the No. 5 supplier, with 231,000 bpd.

The Trump administration is seeking to bolster U.S. energy investments in Iraq. According to Industrial Info Resources data, there are 38 active Oil & Gas Production and Pipeline projects in Iraq, with a total investment value of US$14.45 billion. For more on that, see July 16, 2026, article - U.S. Shows Strong Interest in Iraqi Oil.

Top 5 Exporters to U.S. for early July 2025

• Canada -- 4.4 million bpd
• Saudi Arabia -- 394,000 bpd
• Mexico -- 388,00 bpd
• Brazil -- 331,000 bpd
• Iraq -- 220,000 bpd

Top 5 Exporters to U.S. for early July 2026

• Canada -- 3.8 million bpd
• Venezuela -- 483,000 bpd
• Mexico -- 260,000 bpd
• Ecuador -- 190,000 bpd
• Colombia -- 134,000 bpd

Total U.S. crude oil imports were around 5.3 million bpd for the week ending July 10, compared to 6 million bpd at the same time last year, federal data show. The largest crude oil producer in the world, U.S. commercial crude oil inventories declined 1.7 million bpd during the week, leaving them 6% below the five-year average for this time of year.

The nation's Strategic Petroleum Reserve is also halfway depleted, leaving supply-side buffers at a premium. An early-July report from the International Energy Agency was still optimistic about the prospects for war-relief, though its forecast was heavily dependent on the resumption of traffic through the Strait of Hormuz.

The Houthi rebel group in Yemen, which draws on Iran for support, could complicate matters further by blocking flows through the Red Sea.

By the Numbers

• $10 per barrel jump in Brent price in less than a week
• 6% below five-year average for U.S. commercial crude oil inventories

Key Takeaways

• Oil supplies are dwindling as Middle East war intensifies.
• The U.S. took in no oil from Iraq or Saudi Arabia last week.

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