By Carol Ryan
If the White House hoped tapping 40% of the U.S. Strategic Petroleum Reserve would quickly push down oil prices, it hasn't worked.
News this week that member countries of the International Energy Agency would coordinate to release 400 million barrels of oil from their emergency stockpiles, of which the U.S. will contribute close to half, barely touched the oil price.
Big as the number sounds, it isn't nearly enough to compensate for the loss of barrels passing through the Strait of Hormuz. Analysts expect the total IEA release to add around 3 million barrels of crude and refined products a day. But according to Janiv Shah, a vice president at Rystad Energy, nine to 10 million barrels of oil a day are currently trapped behind the Strait of Hormuz, even accounting for the flows that are likely to be diverted to pipelines.
So the initial announcement, intended to have a positive impact on sentiment in the markets, seems to have fallen flat. Brent was trading around $90 a barrel on the day of the IEA announcement and ended the week at around $103.
When the barrels do eventually hit the physical oil market, they should bring prices down at least some. But another problem is that strategic reserves take longer to unlock than commercial stocks, especially if they are in specialized storage facilities.
The U.S. SPR holds 415 million barrels of crude in 61 underground salt caverns in Louisiana and Texas. But it will be hard to get it out quickly. The Biden administration made a similar-size draw at the start of Russia's full-scale invasion of Ukraine in 2022, which left the store at just 60% capacity. As more oil is extracted, pressure levels in the caverns fall, which slows subsequent withdrawals.
The SPR also uses the same pipelines and ports as shale producers, so infrastructure to carry the extra oil is constrained. It will take four months to get the full amount to market.
Iraq, Kuwait and Saudi Arabia have all shut down some production as they run out of places to store oil trapped behind the strait. Having barrels from strategic stocks hit the market over the next few months could provide a buffer until Middle Eastern flows get back to normal. But of course, no one has a clear idea when that will be, or just how much oil will be needed.
Although then-President Joe Biden claimed the 2022 release reduced U.S. gasoline prices by 40 cents a gallon, this was based on "theoretical considerations of what the price could have been without the SPR release, " rather than the actual behavior of prices, according to an analysis by the Oxford Institute for Energy Studies.
The SPR was set up after the 1973 oil crisis to prevent the U.S. from running out of physical barrels, rather than to intervene in global oil prices. Such a shortage is unlikely now that the U.S. is the world's biggest oil producer. From a physical supply perspective, North America is the best-supplied region in the world right now, but is still exposed to the economic fallout of rising global energy prices.
Releasing barrels from finite stocks has less effect on the oil price than an output increase by the Organization of the Petroleum Exporting Countries normally would -- most OPEC production is currently trapped behind the Strait of Hormuz. The sheer weight of money in oil markets also makes it hard to influence. Around 100 million barrels of physical oil are bought and sold every day, but the daily volume of oil trading on derivatives markets can reach 6 billion barrels.
The Trump administration is arguably handling the SPR release better than the Biden administration. Instead of selling the oil into the market as Biden did, and hoping to be able to buy it back cheaply later, the White House will effectively lend the market 172 million barrels now in return for 200 million barrels in future. It can do this because further-out futures prices are lower than today.
President Trump complained about his predecessor draining the SPR four years ago and called it "a futile attempt to reduce oil and gasoline prices." But he has topped up the reserve by a mere 1 million barrels since beginning his second term. Filling the stockpile to the brim will cost around $20 billion according to Energy Secretary Chris Wright.
For countries without the domestic energy production of the U.S. -- including the likes of Europe, China and Japan -- the fallout of the Iran war makes it likely that they will seek to sock away even more oil in the future. Ironically, that should keep oil prices higher for longer.
Write to Carol Ryan at carol.ryan@wsj.com
(END) Dow Jones Newswires
March 14, 2026 05:30 ET (09:30 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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