The 700-Million-Barrel Weapon the U.S. Government Uses to Control Oil Prices

Because traffic through the Strait of Hormuz is tightening global oil supply, the United States and the International Energy Agency are preparing to release about 400 million barrels of oil from their strategic reserves. Of that amount, 172 million barrels will come from the U.S. Strategic Petroleum Reserve (SPR).The SPR is a federal program that allows the United States to buy and store crude oil in underground facilities along the Louisiana Gulf Coast. The system can hold about 714 million barrels, but today it contains roughly 415 million barrels, which means the reserve is currently about 58 percent full.Releasing oil from this reserve is not new. The last major release occurred in 2022, when the United States sold 180 million barrels over six months, following the Russia-Ukraine war's disruption of global energy markets.One important rule governs these releases. When a government sells oil from its strategic reserves, it must eventually replace those barrels. In most cases, the government has about one year to buy the oil back and refill the reserve.That means every emergency release is not just a market intervention today. It also creates a future obligation to repurchase the oil and rebuild the reserve.