This week the finance ministers of the G7 — the US, UK, France, Germany, Italy, Japan, and Canada — are meeting specifically to discuss a coordinated emergency release of strategic oil reserves in response to the Hormuz disruption.
This is significant. The last time the G7 coordinated an emergency reserve release was in 2022 in response to Russia's invasion of Ukraine. It worked — temporarily. Here is what they can do, what the limits are, and what it means for your gas price.
What Strategic Petroleum Reserves Are
Every major industrialized nation maintains a stockpile of crude oil specifically for supply emergencies. The US Strategic Petroleum Reserve holds approximately 350 million barrels — about 17 days of total US consumption. The IEA coordinates reserves among member nations, which collectively hold about 1.5 billion barrels.
What a Coordinated Release Looks Like
In the 2022 Russia response, the Biden administration released 50 million barrels from the US SPR while IEA member nations released an additional 60 million barrels. The combined 110 million barrel release dropped crude prices approximately $8-12/barrel for 4-6 weeks. A comparable coordinated release today would have a similar effect — dropping WTI from $100-$103 to approximately $88-$95 for about a month. At the pump, that translates to $0.20-$0.35/gallon temporary relief.
Why It's Not a Solution
The 2022 release worked because the underlying supply disruption was partially offset by increased production from Saudi Arabia and the US. The Hormuz closure is different. The oil is being produced. It simply cannot move. Releasing SPR barrels adds supply to Western markets but does not solve the transit problem. Once the reserve release ends, prices return to where they were unless Hormuz reopens.
The Real Question This Week
The G7 meeting is really about two things: buying time and coordinating diplomatic pressure. The reserve release buys 4-6 weeks. The diplomatic pressure — coordinated G7 messaging to China to use its leverage with Iran — is the actual mechanism that could end the crisis.
Watch for any joint G7 statement that mentions China by name as a potential mediator. That would be the most significant development of the week.
— K. Lorraine, The Hormuz Effect
Today's free weekly newsletter is also live. Subscribe free at hormuzeffect.com to get every Thursday's energy briefing delivered to your inbox.
Data sources: IEA Oil Market Report, US Department of Energy, CNBC, Reuters.
The Hormuz Effect is an independent newsletter produced for informational purposes only. Nothing in this publication constitutes financial, investment, legal, or political advice, and no reader-advisor relationship is created by subscribing or reading. All gas price projections and economic estimates are based on publicly available data and historical models — they are not guaranteed forecasts, and actual outcomes may differ materially. The Hormuz Effect is not affiliated with any political party, campaign, candidate, political action committee, or advocacy organization. Analysis of political topics reflects data and historical patterns only and does not constitute an endorsement of any candidate, party, or policy position. References to third-party apps, services, or websites are for informational purposes only — we are not responsible for the accuracy or availability of external sources. Data sources are cited within each article. While we make every effort to ensure accuracy, readers should independently verify information before making financial or other decisions. © 2026 The Hormuz Effect. All rights reserved.