Why the US Strategic Petroleum Reserve matters amid US-Iran tensions

Published 9 July 2026 · india

Last month, the United States Strategic Petroleum Reserve (SPR) fell to its lowest level since 1983 as renewed tensions between the United States and Iran

Last month, the United States Strategic Petroleum Reserve (SPR) fell to its lowest level since 1983 as renewed tensions between the United States and Iran raised concerns about the stability of global oil supplies and prices. US President Donald Trump acknowledged to reporters on Wednesday that anytime the US strikes Iran, oil prices jump. And they did. Brent futures topped their highest level since June 19 on Wednesday. Brent futures settled at $78.02 a barrel, up 5.2 percent from the day before. Meanwhile, the SPR fell by 6.2 million barrels in the week ending July 3 to 319.5 million barrels, according to data from the Department of Energy, marking its lowest level since the Reagan administration. It has a storage capacity of 713.5 million barrels, a level it was last close to around the 2010s. Today, the US produces more oil than any country in the world and is a net exporter of petroleum products. Roughly 60 percent of the crude oil refined in the US comes from domestic production. The remaining 40 percent is imported, of which roughly 60 percent comes from Canada and another 7 percent from Mexico. Only about 7 percent of the crude oil consumed in the country travels through the Strait of Hormuz. So why do tensions with Iran still affect prices at US petrol pumps? Crude oil isn’t priced based on where it was produced but on global benchmark prices that reflect worldwide supply and demand. “Independence doesn’t mean price security or price independence because oil is a globally traded commodity and all markets are interrelated,” Maksim Sonin, an energy executive who works with Stanford University’s Center for Fuels of the Future, told Al Jazeera. If several million barrels of oil are suddenly at risk because exports through the Strait of Hormuz are disrupted, buyers around the world begin competing for replacement supplies from other countries. That increased competition pushes global crude prices higher, raising costs for US refiners and, ultimately, consumers. “Historically, strategic reserves are meant to be a short-term solution to buy governments time to deal with the situation, rather than a silver bullet or a complete solution.

The longer a crisis goes on, the less flexibility governments have with their strategic reserves,” Sonin added. Higher crude prices ripple well beyond topping off at the petrol pump. Airlines pay more for jet fuel, trucking companies spend more on diesel, driving up the cost of food. Higher transportation costs are passed along to consumers through more expensive groceries, goods and travel. In early March, the US first tapped the SPR following the initial strikes on Iran. Despite that, prices for consumers still jumped significantly. On February 28, the day the US and Israel first struck Iran, the price for a gallon of petrol was $2.98 ($0.79 per litre) and by mid-May it had jumped to $4.48 ($1.18 per litre), according to the American Automobile Association (AAA), which tracks daily petrol prices in the US. What is the Strategic Petroleum Reserve? The Strategic Petroleum Reserve is the world’s largest emergency stockpile of crude oil. The SPR is a mix of foreign and domestic crudes which are a combination of sweet and sour. The US established the reserve in 1975 following the Arab oil embargo when several Middle Eastern producers restricted exports to the US, causing severe fuel shortages and exposing the country’s dependence on imported energy. The push to create the reserve began several decades earlier, starting in 1944. Today, hundreds of millions of barrels of crude are stored underground in salt caverns in four locations along the US Gulf Coast and can be released during major supply disruptions. They can be distributed to nearly half of all US oil refineries using interstate pipelines or barges. Once released, the oil will then be refined and sold around the globe to balance the void left by decreased supply. Unlike commercial inventories held by private companies, the SPR exists for extraordinary circumstances like war and natural disasters. It was tapped following Hurricane Katrina in 2005 after the Category 5 storm devastated the Gulf Coast, which produced 50 percent of domestic oil output. The US government also dipped into it for six months after Russia’s invasion of Ukraine, in addition to the current release, which began in March and was done in coordination with the International Energy Agency, a coalition of 28 countries that supports energy supply security through energy policy cooperation.