Executive Summary: Rigs: The total US rig count decreased by 2 during the week of May 4 to 446. Infrastructure: The Trump administration is talking a good game about refilling the US Strategic Petroleum Reserve (SPR), but a budget request would leave the reserve well short of the mark. Storage: East Daley expects a 1.58 MMbbl injection from commercial and Strategic Petroleum Reserve (SPR) inventories for the week ending April May 16.
Rigs:
The total US rig count decreased by 2 during the week of May 4 to 446. Liquids-driven basins decreased by 1 W-o-W from 446 to 444.
Infrastructure:
The Trump administration is talking a good game about refilling the US Strategic Petroleum Reserve (SPR), but a budget request would leave the reserve well short of the mark.
The SPR today holds 399 MMbbl, or 56% of its 714 MMbbl capacity. Last Sunday (May 11), the US House committee released a 2026 budget proposal that includes $1.5B to replenish and maintain the SPR. US Energy Secretary Chris Wright in March estimated that it would take $20B to fully refill the SPR.
The SPR consists of four salt dome storage sites along the Gulf Coast: two sites in Texas (Bryan Mount and Big Hill) and two in Louisiana (West Hackberry and Bayou Choctaw). Congress created the reserve under the Energy Policy and Conservation Act in December 1975 in reaction to the 1972-1973 oil crisis, when OPEC embargoed oil in response to US’ aid to Israel during the Yom Kippur War. Under the law, the SPR can release crude oil for emergency drawdowns, test sales, exchange agreements and nonemergency sales.
The Biden administration drew down the SPR in 2022 in response to Russia’s invasion of Ukraine. The 2022 release took SPR inventory to 348 MMbbl, or 48% of capacity, a level not seen since the early 1980s. The Department of Energy under Biden then began refilling the SPR through relatively small purchases so as to minimize upward pressure on prices. In the following two years, the DOE has repurchased ~20 MMbbl to store at Bryan Mound and Bayou Choctaw. The 180 MMbbl released were sold for ~$95/bbl and have been slowly bought back for ~$76. At the recent rate, it would take another 30 years to refill the SPR to pre-2022 levels.
President Trump has called for the SPR to be fully refilled, emphasizing its importance in shielding US markets from global supply disruptions. However, what Congress has proposed would only buy ~20 MMbbl at current prices, or 60 Mb/d over the 2026 budget year. At that pace, it would still take more than 13 years to fully refill the SPR, and ~10 years to return the SPR to pre-2022 levels of ~600 MMbbl.
If lawmakers ever get serious about refilling the SPR, it could have a profound impact on US crude oil markets. Light sweet production would be pulled from the Permian and Bakken basins and heavy sour barrels from the Gulf Coast, as shown in East Daley’s Crude Hub Model. Stronger demand would also bolster domestic prices.
Storage:
East Daley expects a 1.58 MMbbl injection from commercial and Strategic Petroleum Reserve (SPR) inventories for the week ending April May 16. We expect total US stocks, including the SPR, will close at 843 MMbbl.
The US natural gas pipeline sample, a proxy for change in oil production, increased 1.4% W-o-W across all liquids-focused basins. Samples increased 2.6% in the Permian and 1.6% in the Eagle Ford and decreased 1.7% in the Gulf of Mexico and stayed flat in the Williston Basin. The Rockies and the Gulf of Mexico have a high correlation between gas volumes and crude oil volumes, whereas the Permian and Eagle Ford basins correlation is less than 45%.
We expect US crude production to be 13.4 MMb/d. According to US bill of lading data, US crude imports increased to 6.3 MMb/d. More than 60% of the supply originated from Canadian pipelines and vessels into the US, with the remainder largely coming from vessels carrying crude from Mexico and Brazil.
As of May 16, there was ~778 Mb/d of refining capacity offline, including downtime for planned and unplanned maintenance. EDA expects gross crude input into refineries to increase, coming in at 16.55 MMb/d.
Vessel traffic monitored by EDA along the Gulf Coast increased W-o-W. There were 22 vessels loaded for the week ending May 17 and 20 the prior week. EDA expects US exports to be 3.7 MMb/d.
The SPR awarded contracts for 6.0 MMbbl to be delivered to Choctaw from February–May ‘25 and 2.4 MMbbl to be delivered to Bryan Mound April–May ‘25. The SPR has 400 MMbbl in storage as of May 9, 2025.
Regulatory and Tariffs:
Presented by ARBO
Tariffs:
Tallgrass Pony Express Pipeline, LLC A new pumpover service and fee was added to deliveries to Magellan Terminal at Cushing, OK with the agreement of a non-affiliated shipper. Expired and unused rate programs were also canceled along with various language clarifications and revisions. FERC No 1.28.0 IS25-305 Effective June 1, 2025.
Seaway Crude Pipeline Company LLC The temporary volume incentive rates were extended through May 31, 2025. FERC No 2.95.0.0 IS25-302 Effective May 1, 2025.
The above information is provided by ARBO’s Oil Pipeline Tariff Monitor. For more information on regulatory proceedings or tariff rates, please contact please contact Corey Brill via email at corey@goarbo.com or phone at 202-505-5296. https://www.goarbo.com/