A gallon of regular gasoline in the United States now costs more than it did at any point during the 2022 price spike, and the government agency responsible for tracking energy markets says relief is not coming soon. The U.S. Energy Information Administration’s Short-Term Energy Outlook, updated in May 2026, projects that global oil inventories will not return to pre-conflict levels before early 2027, even under a best-case scenario in which hostilities with Iran end immediately. The conflict has removed so much crude from the market that no combination of emergency stockpile releases, alternative sourcing, or demand reduction has been able to close the gap.
The scale of the disruption is staggering. The EIA estimates that Middle East supply losses, combining shut-in Iranian production with crude stranded by the near-total interruption of Strait of Hormuz transit, peaked near 10.8 million barrels per day in May 2026. The Strait is the chokepoint through which Iraqi, Kuwaiti, Emirati, and Saudi crude reaches global markets. Losing 10.8 million barrels per day is the equivalent of removing the entire output of every OPEC member except Saudi Arabia from the world market. It represents roughly 10 percent of global consumption.
The largest coordinated stockpile release in history
Governments moved fast, but the hole they are trying to fill is enormous. The International Energy Agency announced that its member countries would collectively release up to 400 million barrels from government-controlled strategic reserves, according to the agency’s emergency response framework. For comparison, the previous record was the 60 million barrels released during the 2011 Libya crisis. IEA members hold more than 1.2 billion barrels in strategic stocks, so a 400-million-barrel draw would consume roughly a third of that buffer. The sheer size of the commitment signals that consuming nations view this disruption as structural, not a temporary price spike.
In the United States, the Department of Energy authorized the release of 172 million barrels from the Strategic Petroleum Reserve, which held approximately 395 million barrels before the conflict began, according to the DOE’s weekly inventory reports. As of the most recent data, 17.5 million barrels had physically left the salt caverns in Louisiana and Texas. That is roughly one-tenth of the total authorization. The slow pace is not bureaucratic delay. Moving crude from underground storage to Gulf Coast refineries requires weeks per tranche, and the Department of Energy has not published forward delivery schedules for the remaining volume.
Across Europe, commercial petroleum inventories have been declining steadily alongside the coordinated government draws. Tanker-tracking services report fewer loaded very large crude carriers departing key Persian Gulf export terminals. Together, these indicators confirm what the headline numbers suggest: the deficit is real, it is large, and it is not closing quickly.
Critical information the market is still missing
For all the data flowing out of government agencies, several crucial pieces remain absent. The IEA announced its 400-million-barrel release as an aggregate figure but has not published a country-by-country breakdown. Without that detail, it is impossible to know whether the burden falls proportionally across members or lands disproportionately on a few large holders like the United States, Japan, and Germany. That distinction matters because each country faces different statutory minimums and domestic political constraints on how far reserves can be drawn down.
The pace of the U.S. SPR release is similarly unclear. Whether the remaining authorized barrels flow at a steady rate or accelerate depends on refinery demand, pipeline capacity, and executive decisions the Department of Energy has not disclosed. The statutory framework governing emergency releases grants the administration wide discretion over timing and auction design, and similar flexibility exists in most IEA member countries. Headline authorizations, in other words, may not translate into predictable, linear deliveries.
Then there is the question that matters most to consumers: when do prices come down? Brent crude has been trading above $120 per barrel since the conflict intensified, well above the $75-to-$85 range that prevailed through most of 2025. Retail gasoline prices in the United States have followed, with the national average exceeding $5 per gallon in multiple weeks this spring, according to EIA weekly retail data. The agency’s outlook does not project a return to prior price ranges until inventories rebuild, which under its base case does not happen before early 2027. For households already stretched by years of elevated energy costs, that timeline translates into higher fuel bills, higher shipping costs, and persistent inflationary pressure on food and goods for at least another 18 months.
Supply chains are already being rewired
Beyond the immediate inventory math, a slower-moving but potentially more consequential shift is underway. Asian refiners, historically the largest buyers of Persian Gulf crude, have been accelerating purchases from West Africa, Brazil, Guyana, and the Caspian region. Some of those deals are being locked into multi-year contracts. Once a refinery qualifies a new crude grade, adjusts its processing configuration, and renegotiates shipping routes, it rarely switches back quickly. Supply chains, once rerouted, tend to stick.
If that sourcing shift hardens, the rebalancing timeline could stretch well beyond early 2027 even after Iranian barrels and Strait of Hormuz transit return to the market. Benchmark price spreads between Middle Eastern and Atlantic Basin crudes may remain compressed as buyers demand discounts to compensate for perceived geopolitical risk. Freight patterns could shift permanently, with more long-haul voyages from the Americas to Asia replacing shorter Gulf-to-Asia routes, reshaping tanker demand and regional refining margins for years.
On the supply side, U.S. shale producers and deepwater operators in Brazil and Guyana face their own constraints. Shale output can ramp relatively quickly, but rig counts and completion crews were already stretched before the conflict. Deepwater projects operate on multi-year development timelines. Neither source can fully offset 10.8 million barrels per day of lost supply in the near term. OPEC’s remaining spare capacity, concentrated almost entirely in Saudi Arabia and the UAE, is itself constrained by the same Strait of Hormuz transit risks that created the shortage.
Why 18 months is the floor, not the ceiling
The EIA’s projection of an 18-month rebalancing period assumes a best-case scenario: an immediate end to hostilities, rapid restoration of Iranian production, and a full reopening of Strait of Hormuz shipping lanes. Each of those assumptions carries significant downside risk. Iranian oil infrastructure has sustained physical damage that will require months of repair, according to satellite imagery analysis published by commercial intelligence firms. Insurance and sanctions frameworks that have frozen Iranian trade will not unwind overnight. And the Strait itself, even once militarily secure, will need to be re-certified by maritime insurers before commercial traffic returns to pre-conflict volumes, a process that took weeks even after smaller incidents in 2019.
Demand destruction offers some offset. At sustained high prices, consumers and industries cut consumption, and early signs of that response are visible in weakening jet fuel demand and slower industrial activity in parts of Europe and Asia. But demand destruction is a blunt instrument. It eases the supply gap at the cost of economic growth, and it does not rebuild inventories. It simply slows the rate at which they decline.
What happens when the cushion runs out
Strategic reserves are doing the heavy lifting right now, and they are finite. The 400-million-barrel IEA release and the 172-million-barrel U.S. SPR authorization together represent a massive but depletable cushion. If the conflict drags on, or if the post-conflict recovery is slower than the EIA’s base case assumes, consuming nations will face a stark choice: continue drawing down reserves toward statutory minimums, or accept higher prices and let the market ration supply through cost.
Neither option is painless. The first leaves countries dangerously exposed to the next disruption. The second means the price at the pump, the cost of heating a home, and the price of shipping goods across oceans all stay elevated well into 2027. For policymakers, the calculus is straightforward but unpleasant: even the best possible outcome from here still takes a year and a half to fix.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
