The United States is about to release over 100 million barrels from its oil reserves, with the first batch reportedly amounting to 45 million barrels.

As conflicts in the Middle East continue to drive up energy prices, the United States has begun utilizing its Strategic Petroleum Reserve (SPR).

On Friday, Eastern Time, after the U.S. stock market closed, media reports citing sources said the U.S. government plans to release about 45 million barrels of crude oil from the SPR in the first phase, aiming to curb rising fuel prices.

This action is a “preemptive move” within the overall emergency release plan of 172 million barrels, and also part of the global oil reserve release announced last Friday by the International Energy Agency (IEA). Against the backdrop of supply disruptions and geopolitical risks, the market is closely assessing whether large-scale use of strategic reserves is merely a “short-term painkiller” or a key factor that could alter the trend of oil prices.

Based on the information disclosed this Friday, the initial release by the U.S. accounts for approximately 26% of its planned total release.

Last Friday, the IEA announced that its 32 member countries agreed to release a total of 400 million barrels of strategic oil reserves. This is the largest collective release in IEA history. After the Russia-Ukraine conflict in 2022, IEA members released about 183 million barrels twice, but this time the scale has doubled directly.

Later on Friday evening, the U.S. Department of Energy confirmed that, as part of the IEA-coordinated global effort, the U.S. plans to release 172 million barrels of SPR to respond to oil price increases triggered by U.S. and Israeli airstrikes on Iran. Based on the current release speed, the process is expected to take about 120 days.

Subsequently, Wallstreet.cn pointed out that the U.S. release is significantly delayed. After the president issues the release order, the Department of Energy needs about 13 days to conduct bidding, award contracts, and begin deliveries. Then, crude oil must be transported via pipelines or tankers to refineries and end-user locations. Even with immediate action, the oil stocks would only start entering the market by late March.

The 172 million barrels of SPR released represent one of the largest policy interventions by the U.S. government in recent years. Notably, this release is not a simple “sale,” but more akin to an “exchange” mechanism: companies receive crude oil now but are required to return it in the future, possibly with interest. This means the policy goal is not only short-term price suppression but also medium- to long-term inventory management.

From historical experience and market structure, the impact of releasing oil reserves on prices has clear “timing” and “structural” characteristics.

• Short-term: Alleviating spot shortages and lowering near-month prices

Media reports indicate traders have begun selling nearby futures and buying longer-dated contracts, reflecting that the release will increase short-term supply, but there will still be pressure to replenish stocks later.

This suggests: spot prices may decline, and futures curves could become “backwardated” (more expensive in the distant future).

• Medium-term: Price support persists, geopolitical risks dominate

Similar to the 2022 Russia-Ukraine conflict, oil reserve releases can only hedge part of the “supply gap” and are unlikely to reverse the overall trend.

The current situation is more complex: Middle Eastern supply disruptions are larger; shipping risks through the Strait of Hormuz and other routes remain; energy infrastructure itself is a target for attacks.

Therefore, even with a release of 172 million barrels, the market may still experience high volatility.

• Long-term: Inventory pressures and policy space are limited

Strategic petroleum reserves are essentially a “safety cushion.” The U.S. SPR has a total capacity of about 700 million barrels, but in recent years, it has been used extensively, leaving inventories at historically low levels.

Wallstreet.cn noted this week that after releasing 172 million barrels, U.S. total SPR stocks will fall to 244 million barrels, well below the statutory red line of 252 million barrels. Additionally, salt cavern storage structures require maintaining a minimum safety stock of 150-160 million barrels. Even if the red line is broken, there is less than 90 million barrels of additional release capacity.

In summary, continued releases will weaken future crisis response capabilities, as the marginal effectiveness of policy tools diminishes, and subsequent replenishment at high prices will increase fiscal costs.

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