Crude oil storage at Cushing, Oklahoma—the critical delivery hub for America's benchmark oil price—has dropped to less than 2 million barrels above its operational minimum, according to a June 12 report from Wood Mackenzie. The energy research firm warns that if the current drawdown continues, Cushing could hit rock bottom within one to two weeks. The dramatic decline is being driven by a global supply crisis tied to Middle East conflict, which has pushed US crude exports and refinery activity to surge even as domestic production remains steady.
The numbers paint a stark picture of how quickly the situation has deteriorated. Inventories at Cushing plummeted 11.3 million barrels between early April and early June, falling to less than 25 million barrels total. Capacity utilization dropped below 29% in early June, compared to the all-time low of 26.7%—a level that has historically served as a reliable proxy for Cushing's operational floor. Wood Mackenzie's monitoring covers fixed-roof tanks, underground storage caverns, and floating-roof tanks, providing more comprehensive data than satellite-based alternatives that can only estimate volumes in floating-roof facilities. Storage draws aren't limited to Cushing: Petroleum Administration for Defense District 3 (PADD 3) crude inventories along the Gulf Coast have also been declining since early May.
"Rapid Cushing storage draws have been spurred by global supply disruptions surrounding the Middle East conflict," said Dylan White, Director of North American Crude Markets at Wood Mackenzie. The report notes that although domestic supply remains unaffected in the US and Canada, global shortages have supported surges in US crude exports and refinery runs, contributing to steep commercial storage draws despite substantial Strategic Petroleum Reserve releases into Gulf Coast markets. White warns the situation has reached "a critical juncture" with the buffer exceptionally thin, adding that while the market is responding, "greater flows into Cushing shifts volumes away from other key hubs where inventories are also low."
The market has already begun adjusting to the crisis. Permian pipeline flows to Cushing—redirected away from the Gulf Coast—have spiked to maintain minimum physical inventories at the hub. Price spreads between West Texas Intermediate crude at Cushing and coastal markets have tightened considerably as traders react to the supply squeeze. Wood Mackenzie expects storage inventory draws to accelerate at key hubs across the US now that Cushing is nearly empty, potentially driving critical inventory levels at major facilities within one to two months. That timeline would eventually limit the US export response that has so far helped offset global supply losses.
The depletion of storage carries significant implications for oil prices in the months ahead. "Stock draws—including SPR, commercial, and floating inventories—have played an important role in softening the blow of lost Middle East supply," White concluded. "The inventory cushion is not infinite. If supply disruptions persist, oil prices are expected to reflect a significantly tighter physical market as stocks are depleted." Cushing's role as the physical delivery point for the US crude benchmark makes its storage levels a powerful price indicator—and right now, that indicator is flashing red.