Emergency oil reserve nears 40-year low as experts warn gas prices could spike

WASHINGTON —

The U.S. strategic petroleum reserve is nearing record lows as emergency oil releases are being used to offset shortages tied to the war in Iran, with experts warning of potential impacts on gas prices.

“Probably at some point in mid to late summer is when these releases could potentially be over. And if the Strait of Hormuz isn’t reopened by then, we could see gas prices slingshot to potentially new record levels,” said Patrick De Haan, an analyst with GasBuddy.

He said gasoline prices above $5 a gallon nationally are “within the realm of possibility,” but cautioned that the outlook depends on global demand, the release rate and whether the Strait reopens.

The reserve, created after the 1970s oil embargo as a backup supply for major energy emergencies, is now down to just over 365 million barrels, according to the Get the Facts data team. De Haan said this is just days away from the lowest point since the 1980s.

The war in Iran has disrupted global oil flows, prompting the U.S. to tap into the reserve to keep more oil in the market and hold down prices at the pump.

President Donald Trump, who previously criticized President Joe Biden for tapping the reserve after Russia invaded Ukraine, is now using the same emergency supply to address the current crisis.

The Biden-era drawdown was never fully replenished, and the current releases are pushing reserve levels back down sharply.

A spokesperson for the Energy Department said in a statement, “Unlike the previous administration, which drained the SPR and used the revenue to help fund their Green New Scam agenda, the Trump administration exchanged the barrels for lower-cost barrels that will be delivered back to the SPR next year. These exchanges will more than replace the 172-million-barrel release. To date, the premium return rate has been about 26%, which is over 34 million barrels of oil, and potentially over $3 billion in taxpayer savings.”

De Haan also highlighted another concern: diesel-type fuel inventories are approaching critically low levels. These fuels are essential for moving trucks, freight, farm equipment, and goods across the country.

If the Strait of Hormuz reopens, De Haan said gas prices could start coming down relatively quickly. However, he cautioned that returning to pre-war levels could take at least a year, if not longer. Speaking about the broader challenge of rebuilding depleted oil supplies, he compared it to draining Olympic-size swimming pools and then trying to refill them with a garden hose.