Gas prices are surging across the U.S., with motorists paying about 20% more per gallon than before the start of the U.S. war with Iran. Experts say one option that could help tame prices at the pump is tapping the Strategic Petroleum Reserve, the nation’s emergency oil stockpile designed to cushion supply shocks.
The average price per gallon stood at $3.54 on Tuesday, up from about $2.92 a month ago, according to AAA. The price hike reflects disruptions to oil tankers traveling through the Strait of Hormuz, the critical waterway through which roughly one-fifth of the world’s oil supply passes each day.
President Trump has sought to convince shippers that the Strait of Hormuz will remain safe. Last week, he pledged that a little-known U.S. government agency, the U.S. International Development Finance Corporation, insure ships sailing through the Persian Gulf.
On Monday, the president told CBS News that the war with Iran is “very complete,” a comment that eased nerves on Wall Street and in global energy markets. Oil prices tumbled from almost $100 per barrel on Monday to $88.15 on Tuesday, although crude remains significantly higher than its roughly $70 per barrel range before the war.
The White House told CBS News it is also reviewing “all credible options” for lowering gas prices.
Tapping the Strategic Petroleum Reserve, or SPR, could offer some price relief, experts say. But it “cannot fully offset the supply loss” from the Strait of Hormuz, noted energy analytics firm Wood Mackenzie in a March 10 report.
Here’s what to know about the SPR, a network of salt caverns in Texas and Louisiana that can hold up to 714 million barrels of crude.
What is the Strategic Petroleum Reserve?
The SPR was created in 1975 under the Energy Policy and Conservation Act as a type of economic “insurance policy” as a response to the 1970s energy crisis, energy analyst Kevin Book, managing director of ClearView Energy Partners, told CBS News. “It was designed to release oil to refiners when they otherwise couldn’t get it.”
The SPR is designed to provide petroleum in the event of disruptions to the nation’s oil supply, such as a natural disaster. “It’s meant for temporary disruptions, and if this is a prolonged conflict, then you can’t rely on it,” Bernard Yaros, lead U.S. economist at Oxford Economics, told CBS News.
Because other nations have their own stockpiles, a coordinated oil release would likely have a larger effect on prices, according to analysts.
“When you have the U.S. doing this in coordination with Asia and Europe all tapping into stockpiles at once and guiding markets that they’ll continue to release stocks of oil to fill the supply hole left by the conflict, that’s where you get more bang for your buck in terms of the effect on prices,” Yaros noted.
But finance ministers from the Group of Seven, or G7, on Monday said they are not ready to release their strategic oil reserves. The forum includes the U.S., Canada, Japan, Italy, Britain, Germany and France.
“It was not that someone was against, it’s just about timing. More analysis is needed,” a G7 official familiar with the matter told Reuters Monday.
Where is the SPR?
The SPR comprises four underground storage sites in Texas and Louisiana that sit adjacent to roughly half of the nation’s refining capacity, according to Book.
How much oil does it hold?
The storage facilities have the capacity to hold up to 714 million barrels of crude oil. It currently contains 415 million barrels of crude, according to the U.S. Department of Energy.
When was it last tapped?
In 2022, the Biden administration released roughly 200 million barrels of crude from the SPR to curb gas prices that had reached $5 a gallon.
The move marked the largest SPR release in U.S. history. The U.S. has also tapped the reserve during the 1991 Gulf War, Hurricane Katrina in 2005 and the war in Libya in 2011.
Can the SPR help bring down oil and gas prices?
Yes, but its impact may be limited because the Iran war is causing far larger disruptions to oil shipments.
About 20 million to 25 million barrels of oil move daily through the Strait of Hormuz. Even if the U.S. tapped every barrel in the SPR, it would equal only about three weeks of shipments through the strait, petroleum analyst Patrick De Haan said in a research note.
“Using the SPR could temporarily soften prices, but it would not solve the underlying problem — and once the oil is gone, the United States would be more vulnerable to future disruptions,” De Haan added.
Tapping the SPR also won’t provide immediate relief because it requires 13 days for oil from the reserve to hit the market, CSC Commodities energy analyst Sasha Foss told CBS News. There are also limits on how much oil can be released per day, Foss added.
“The SPR can help, but it’s not a silver bullet, and it’s not going to take away all the pressure on consumer prices,” said Nicholas Mulder, professor of history at Cornell University, who studies the economic impacts of wars and sanctions. “The war is driving up prices on the world market, and there isn’t an easy way out.”
The best way to lower oil prices would be reopening the Strait of Hormuz and making it safe for tankers, energy market expert Adi Imsirovic said.
“If you provide war insurance, some ships will say, ‘I’m fully laden and have so much oil on board anyway, I just got insured and I want to get out,’ so you would see some shipping movement,” he told CBS News.
