Oil prices spiked Tuesday as the Iran war continues to jeopardize global supplies, with U.S. strategic stockpiles falling to the lowest level in more than 40 years.

Strategic petroleum reserves, or SPR, are stockpiles of crude oil that nations store in the event of unexpected supply shortages, and America’s SPR levels have plummeted since the war began.

The U.S. Strategic Petroleum Reserve fell by about 6.1 million barrels to 298.7 million barrels last week, the lowest level since January 1983, according to data from the Department of Energy (DOE) on Monday.

The U.S. SPR has a maximum authorized capacity of 727 million barrels, according to the DOE.

Refilling those SPRs will take a long time, experts say, especially with strained global oil supplies.

The U.S. has drawn down about 172 million barrels since March as part of an ongoing globally co-ordinated agreement with the International Energy Agency (IEA) to release 400 million barrels to help calm oil markets after the U.S. and Israel launched joint attacks on Iran.

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The IEA requires its 32 member countries to maintain minimum emergency oil reserves equal to 90 days of net crude oil and petroleum product imports.

Although Canada is a member of the IEA, it is also the only G7 nation that does not have a government-mandated strategic stockpile. That’s mainly because the country is a net exporter of crude oil.

The vital Strait of Hormuz shipping channel, which normally sees about a fifth of the world’s oil supply pass through, has had access severely restricted amid the conflict. Iran has declared the waterway closed and warned that any cargo vessels attempting to pass through the strait without approval could be attacked.

Iran has also been targeting its neighbours in the Persian Gulf region, with strikes damaging oil, energy and maritime shipping infrastructure and facilities. This has further added uncertainty to global oil markets.

A tentative peace agreement between the U.S. and Iran led to a temporary ceasefire in June, but tensions flared up in July as the agreement unravelled.

This week, Iran said it was maintaining its closure of the Strait of Hormuz until the U.S. meets its demands, including financial compensation for damages during the conflict.

Oil prices are set globally based mostly on expectations for supply and demand. When oil supplies run low, that drives the price up, which typically results in higher prices for fuel at gas pumps — including in Canada.

Gas prices have been elevated since the Iran war began and as SPR runs low, especially in the U.S., that increases demand expectations because those stockpiles need to be replenished.

The price of U.S. oil, known as West Texas Intermediate, was hovering around US$83 per barrel on Tuesday at 3 p.m. eastern time, up by about $1 since Monday and from as low as $75 last week.

– with a file from Reuters