The U.S. Department of Energy announced plans to release another 40 million barrels of crude from the Strategic Petroleum Reserve as fuel prices remain elevated nearly seven months into the Iran war. The barrels will be offered through an exchange program, marking the final tranche of the 172 million barrels the United States pledged to a coordinated emergency release organized by the International Energy Agency.
This latest drawdown reflects ongoing pressure from elevated gasoline and diesel prices in the U.S. market. According to the report, U.S. gasoline remains above $4 per gallon, while diesel has climbed above $6 per gallon amid tight middle-distillate supplies and disruptions linked to the Iran conflict. The Strategic Petroleum Reserve ended August with 286.6 million barrels after another 3.1 million barrels left the reserve during the week ending August 28, leaving the reserve more than 445 million barrels below maximum capacity.
Commercial crude inventories have also tightened considerably, with commercial crude stocks falling by more than 48 million barrels over the previous 20 weeks, even as emergency barrels continued exiting the SPR. Inventory levels remain a significant concern. By September 1, distillate inventories were 14 percent below the five-year average, while gasoline inventories were 6 percent below normal seasonal levels.
Under federal law, non-emergency drawdowns are restricted once SPR inventories fall below 252.4 million barrels. A 1981 Government Accountability Office report advised against releases below 250 million barrels except during a very severe emergency. Once the latest release is completed, the reserve is expected to fall to its lowest level since 1982.
The exchange mechanism differs from an outright sale. Companies receiving crude through the exchange must return oil later with additional barrels as interest. The Department of Energy has stated that the exchange program will ultimately return roughly 200 million barrels to the reserve.
Bids for the release are due October 6. Energy Secretary Chris Wright also pressed European countries to fulfill their own emergency-stock commitments, noting that several International Energy Agency members had released only a fraction of what they pledged to the coordinated emergency release. Source: OilPrice.com, article by Julianne Geiger, September 29, 2026
Source: oilprice.com