What is the Strategic Petroleum Reserve?

As the flow of oil through the Strait of Hormuz continues to be restricted due to the ongoing conflict between the U.S. and Iran, the Strategic Petroleum Reserve has taken on a more important role.

Little known outside of the energy industry, the U.S. Strategic Petroleum Reserve (SPR) is the world's largest emergency supply of crude oil, held in underground salt caverns along the Gulf Coast.

The Strategic Petroleum Reserve was created by the Energy Policy and Conservation Act of 1975 after the 1973–1974 Arab oil embargo that led to gasoline shortages, inflated prices, and long lines at the pump. Its primary goal is to buffer the U.S. economy during times of serious petroleum supply interruptions by buffering supply and price impacts. The U.S. also joined 31 other nations to establish the International Energy Agency (IEA), a consortium representing the majority of global oil demand, to provide a coordinated mechanism to respond to potential disruptions in oil supply.

When full, the SPR can hold 714 million barrels of oil. The oil is sold competitively when the President determines that energy policy conditions make it necessary. Historically, it has been used only five times, most recently when President Trump ordered a drawdown in March after the conflict with Iran began.

The reserve contained some 650 million barrels in 2019, but the Russian invasion of Ukraine sent geopolitical and energy shocks throughout the world in 2022 due to disruptions in oil flow, leading to a coordinated drawdown among IEA countries, and the Iran conflict has further reduced that supply to 283 million barrels, the lowest since 1982.

The released crude oil is sold to companies that use or refine it into various products, including gasoline. The government puts the money into an account that is used to pay to refill the SPR. The Department of Energy also manages exchange agreements, where private companies borrow from the SPR and are required to return that amount, plus additional premium barrels.

The low storage levels in the U.S. are also being seen in countries across the world, as less than 6 billion barrels remain. The low storage levels and continuing geopolitical strife are leading to higher prices and increased uncertainty as the winter heating season approaches.

The Energy Information Administration reported that global oil prices averaged $114 per barrel in September 2026, a 20% increase from the previous month, and are expected to remain over $100 a barrel through the end of the year. The EIA also estimates that global inventories fell by 1.9 million barrels per day in the third quarter of 2026 and will drop further through the end of the year.