Washington is drawing down its emergency oil reserves as the Strait of Hormuz blockade continues to keep pressure on oil prices

Keeping gasoline prices low is now the United States’ “goal No. 1,” Vice President JD Vance says. But the Trump administration is pursuing an Iran strategy that is helping keep oil prices high.

As the war with Iran drags on and the Strait of Hormuz remains blocked, Washington wants to intensify military and economic pressure on Tehran while bringing down gasoline prices ahead of the midterm elections.

Before the war, roughly one-fifth of the world’s oil and liquefied natural gas shipments passed through the Strait of Hormuz.

Meanwhile, the Trump administration has embraced a long-term effort to inflict more damage on Tehran, despite growing domestic pressure ahead of the midterm elections, reported Alexander Smith of NBC News.

To increase that pressure, Washington threatened an indefinite naval blockade.

“Watch this space for more announcements coming next week,” U.S. Treasury Secretary Scott Bessent told Newsmax on Thursday. “We are going to apply measures like have never been seen in the history of economic isolation on a country.”

Oil prices rose Friday after the U.S. said its naval blockade of Iranian ports could continue “indefinitely,” reigniting concerns over energy flows through the critical Strait of Hormuz.

Washington threatened to intensify pressure on Iran, and oil prices moved in the opposite direction from where the administration wants them to go.

The head of Saudi Aramco says the world has lost 2.6 billion barrels of oil since the start of the war. According to Reuters, “this makes the current disruption the largest ever in cumulative terms apart from the 1979 Iranian revolution.”

President Trump nevertheless remains bullish. On Friday, the president alluded to a plan to declare the Strait of Hormuz a U.S. territory. “After we finish defeating Iran, which is being very badly defeated — pretty soon, I’ll be declaring the Hormuz Strait a territory of the United States,” Trump told a crowd of law enforcement officers. “Essentially, that’s what it is. We have the blockade. No ships get through unless we want them to.”

U.S. Defence Secretary Pete Hegseth also told reporters Thursday that the U.S. could keep up its naval blockade of Iran “indefinitely” because “we’ll rotate ships in and out, as we have, and we’ll continue to” do.

Maintaining the blockade while trying to contain oil prices has made the Strategic Petroleum Reserve central to Washington’s response. Created after the 1973-74 oil embargo, the SPR is the U.S. government’s emergency crude oil stockpile.

Crude oil stocks in the Strategic Petroleum Reserve fell to their lowest levels since January 1983. The SPR has tumbled below 300 million barrels for the first time since it was filled in the early 1980s, according to Department of Energy data released last week.

The U.S. committed in March to release 172 million barrels from the SPR in response to the disruption. The EIA projects the reserve will fall to around 243 million barrels once the release is completed.

Washington is therefore drawing down America’s emergency oil reserve to protect consumers from an oil shock that its own strategy of maintaining the blockade is helping prolong.

But there are questions about how much more oil can safely be withdrawn. The U.S. Government Accountability Office warned in May that ageing infrastructure and a growing maintenance backlog were putting the SPR’s operational capability at risk. It also found that, as of December 2025, more than a quarter of the SPR’s crude oil inventory was unavailable for drawdown because of construction and cavern outages.

The U.S. Energy Department says at least 70 million barrels must remain in the reserve to safely manage the caverns. Amos Hochstein, a senior energy adviser to President Joe Biden, says that is far too low.

“Don’t believe the people out of the government that are saying the SPR can go to 70 million barrels. It’s nonsense,” Hochstein told CNBC’s “Squawk Box” last Thursday. At that level, the reserve would be depleted to “the point of never resurrecting it,” he added.

The Energy Department disputes warnings about the caverns. Department spokesman Ben Dietderich said claims that the SPR’s storage caverns are at risk of collapse as oil is drawn down are false, Spencer Kimball reported.

There is a limit to how much oil Washington can withdraw, while the administration says the blockade could continue indefinitely. If that happens, high prices themselves could eventually reduce demand as consumers and businesses cut consumption.

There are already signs of weaker demand. Both the International Energy Agency and OPEC have cut their forecasts.

“Our forecast for global oil demand in the second half of 2026 is reduced by roughly 550 kb/d [thousand barrels per day] versus last month’s Report, as the continued closure of the Strait of Hormuz disrupts international supply chains and curtails product availability,” says the IEA in its latest oil market report, released Wednesday. “Elevated fuel prices are putting further downward pressure on oil use.”

OPEC also cut its demand forecast for 2026 on Wednesday. Unlike the IEA, OPEC still expects demand growth, although its outlook was slashed to 580,000 bpd, down from the 780,000-bpd growth expected in its July report.

Weaker demand could eventually help bring oil prices down. But it would come at a cost to consumers and the economy.

If Washington maintains the blockade, it risks keeping oil prices high. If it tries to offset those prices by drawing down the SPR, it consumes a strategic reserve that cannot be used indefinitely. And if it waits for weaker demand to bring prices down, American consumers and the economy bear the cost.

As long as Hormuz remains blocked, Trump’s objectives work against each other.

And with the midterm elections approaching, Washington is running out of time to decide which matters more: maintaining maximum pressure on Iran or bringing gasoline prices down.

Toronto-based Rashid Husain Syed is a highly regarded analyst specializing in energy and politics, particularly in the Middle East. In addition to his contributions to local and international newspapers, Rashid frequently lends his expertise as a speaker at global conferences. Organizations such as the Department of Energy in Washington and the International Energy Agency in Paris have sought his insights on global energy matters.