The U.S. Must Expand Its Strategic Petroleum Reserve

China has exploited its vast strategic stockpile of oil during an ongoing conflict with Iran marked by U.S.–Israeli strikes, Iranian retaliation, and the effective closure of the Strait of Hormuz. It only makes sense, then, that the United States ought to expand its own Strategic Petroleum Reserve (SPR) while imposing stricter limits on politically motivated drawdowns, preserving the reserve for true supply emergencies and national security crises.

Since the start of the Iran war, China sharply cut the amount of oil it imports, keeping a relative lid on global oil prices, with today’s prices far below the $200 a barrel analysts were forecasting in the event of prolonged conflict. This was a valuable bargaining chip for Beijing, as for months now, roughly 25 percent of the global seaborne oil supply was throttled, sending prices spiking and forcing emergency drawdowns of the West’s limited strategic stocks by the U.S. and its International Energy Agency partners. This episode was not a full-scale war, but nonetheless disrupted supply chains and exposed vulnerabilities in U.S. energy security. It demonstrates why Washington must both refill the SPR to its existing 714-million-barrel capacity and expand that capacity substantially, as a future disruption could be far worse.

First, Congress should appropriate funds and authorize purchases to restore the reserve to its full physical capacity as rapidly as market conditions allow, ideally when prices soften after the current disruption. The existing SPR can hold that volume today, as the shortfall is political and budgetary, not technical.

Second, the United States should expand total storage capacity well beyond 714 million barrels. New salt-dome caverns or alternative hardened facilities would provide the margin of safety a superpower requires. A larger reserve would also serve as a deterrent: Potential aggressors would know that Washington can weather prolonged supply shocks without panic or capitulation, which makes other countries more likely to acquiesce to American demands.

Constructing the sort of caverns used for this is a multiyear process, as shown by the Department of Energy’s existing reserve expansion plans. They cannot be rushed for complex geological reasons, but expanding the total U.S. reserve to 1 billion barrels could be done fairly cheaply. Until 2011, the U.S. actually had a plan to do this at an estimated price of $3.7 billion dollars — less than a fifth of one percent of President Donald Trump’s proposed annual defense budget. That expansion plan was canceled by the Obama administration, but the ongoing crisis clearly demonstrates the merit of reviving SPR expansion.

Third, the United States must remove the ability of future presidents to exploit the reserve to solve their own political problems. As I’ve previously written, the Biden administration exploited SPR shortly before the 2022 midterms and refused to refill it afterward, citing high prices of more than $79 a barrel. This came after congressional Democrats blocked refilling the SPR at rock bottom oil prices of just $24 a barrel in 2020 for transparently political reasons — specifically calling it an “oil industry bailout.” According to the U.S. Energy Information Association (EIA),  America’s oil reserve declined by 44 percent during Biden’s tenure, as he used it more as a political reserve than a strategic one. Congress could simply set a price floor and cap to remove this possibility.

The Iran conflict was a live-fire test of energy resilience. America passed, barely, thanks to swift allied coordination and domestic production. The United States’ SPR entered the crisis at roughly 415 million barrels, only about 58 percent full, before releasing 172 million barrels in a coordinated international response. Even after partial rebuilding in prior years, the reserve proved inadequate to buffer the shock without painful market intervention, handing leverage to China.

As the EIA reported, China entered the crisis with nearly 1.4 billion barrels of strategic oil inventories. That’s more than three times the reserve America had, as Beijing had aggressively stockpiled an average of 1.1 million barrels per day as tensions rose.

While the U.S. scrambled to release stocks, China’s massive cushion allowed it to absorb the shock with far less immediate economic pain and greater flexibility. The disparity is not accidental. China treats energy security as a core national priority in an era of competition between the world’s great powers. The U.S., by contrast, has allowed its SPR to languish below capacity for years, treating it more as a tool to advance the individual interests of politicians than a strategic asset.

But relying on last-minute releases and hoping for the best is not a strategy. China’s threefold reserve advantage did not happen by accident; it was built with foresight. The United States must now match and potentially exceed that standard. Refilling the SPR to capacity and expanding its total storage are not optional expenditures; they are essential investments in deterrence, economic stability, and national security in a dangerous world.

The next energy crisis has the potential to be far worse than the temporary partial closure of the Strait of Hormuz. Investing in SPR expansion is the least expensive way to expand America’s leverage.