The United States is acting as the "lender of last resort" for the global oil market with unprecedented export strength.
Last week, the U.S. released over 1.23 million barrels per day from its Strategic Petroleum Reserve (SPR), setting a new weekly record. Over the past four weeks, the average net export of U.S. crude oil and refined products reached a record high of 5.9 million barrels per day, nearly doubling from 3.3 million barrels a year ago.
This has caused the comprehensive landed cost of a barrel of WTI crude oil delivered to Europe to plummet from nearly $160 to $106 within the past month.
According to calculations, at the current release rate, the existing authorized release volume can support approximately 117 more days, until early September. Even if the release rate is increased to 2 million barrels per day, it could be sustained until the end of July.
However, the U.S. oil reserves are ultimately different from the Federal Reserve's money printer. Analysts point out that there is likely a window of opportunity from late May through June. After this period, the continued depletion of the SPR and the accumulation of commercial inventory pressures will begin to raise market concerns about the sustainability of supply.
The Americas collectively ramp up crude exports, but the U.S. is the absolute main force.
Facing the supply gap caused by the blockade of the Strait of Hormuz, the Americas, led by the U.S., have accelerated crude oil exports as a whole.
Compared to the same period in 2025, the combined net exports from the Americas have increased by nearly 4 million barrels per day, roughly equivalent to a quarter of the gap caused by the Hormuz blockade.
In terms of incremental composition, the U.S. leads with a net export increase of 2.6 million barrels per day.
Other countries have also contributed: Canada increased by 400,000 barrels per day; Venezuela, Guyana, Colombia, and Argentina each increased by approximately 200,000 barrels per day; Brazil increased by about 100,000 barrels per day.
The surge in exports has significantly impacted physical oil prices. Previously, Brent futures were at a record premium of over $35 compared to the physical benchmark, Dated Brent. This premium has now narrowed to less than $5.
SPR deployment scale breaks records, release rate exceeds market expectations.
The key to this round of the U.S. export surge lies in the SPR deployment far exceeding expectations.
In March of this year, the U.S., by coordinating with allies for a joint reserve release, committed to lending 172 million barrels of crude oil from the SPR. SPR barrels have already flowed to markets such as the Netherlands, Italy, and Turkey.
The market initially predicted that the actual SPR release rate would struggle to approach 1 million barrels per day, but the actual figure has exceeded 1.23 million barrels per day, the highest weekly level in history.
This means that approximately half of the increase in U.S. net exports has been achieved by depleting strategic reserves, rather than relying entirely on increased production.
As of last week, the SPR has released approximately 31 million barrels cumulatively since its deployment began.
If the entire authorized 172 million barrels are released, the remaining SPR inventory would drop to about 242 million barrels, reaching its lowest level since the early 1980s.
The option exists to order further releases, but pushing an already weakened SPR to its limits could backfire and trigger market panic.
Once SPR resources tighten, the market's core focus will be whether the U.S. can fill the gap with commercial inventories and shale production expansion.
Regarding commercial inventories, when the export surge began, U.S. commercial crude oil inventories were above the five-year average and slightly below the ten-year average, providing some room for maneuver.
In terms of shale capacity, U.S. shale drillers will increase production, initially by rapidly completing drilled but uncompleted wells (DUCs). However, a substantial contribution to overall export volumes is not expected until the final months of this year, making it difficult to fill the gap in the short term.
The window for the White House: May to June.
Considering the above factors, the current timeline is relatively clear.
Analysis suggests the U.S. has operational space from late May, likely extending into June. During this window, SPR depletion and commercial inventory pressure are not yet sufficient to trigger systemic market anxiety.
This window theoretically provides the White House with a time buffer to reach an agreement on the Iran issue.
However, once this window closes, the incremental supply sources the U.S. can rely on will narrow significantly, and the risk of oil prices coming under renewed pressure will increase accordingly.
As noted, the Federal Reserve can add another stack of paper and start the printing press, but America's oil storage tanks do not have the same privilege.
Comments