US Releases Record Oil Reserves as Hormuz Closure Sparks Crisis

A global transportation fuel crisis has emerged following the effective closure of the Strait of Hormuz by Iran, triggered by military strikes from the U.S. and Israel three months ago. The blockade has removed approximately 12.8 million barrels per day from the global supply, causing U.S. jet fuel inventories to hit their lowest levels since 1963 and threatening a breach of critical shortage thresholds in Europe by late June 2026.

In response, Donald Trump authorized a record release of 172 million barrels from the Strategic Petroleum Reserve, invoked the Defense Production Act for California offshore drilling, and authorized the sale of Russian and Iranian oil. Despite these measures, U.S. crude inventories at the Cushing, Oklahoma hub have plummeted toward operational minimums. Industry leaders from ExxonMobil and Chevron have warned that dwindling global buffers could send Brent crude prices to $160 per barrel by July.

The crisis has severely impacted aviation, forcing Spirit Airlines to cease operations and Lufthansa to cancel 20,000 flights. While EU Commissioner Apostolos Tzitzikostas maintains that Europe has no immediate jet fuel shortage, he warned that prolonged instability could trigger a global recession. Meanwhile, Iran has institutionalized the disruption by creating the Persian Gulf Strait Authority to charge tankers up to $2 million per transit in yuan and cryptocurrency. Diplomatic negotiations to reopen the waterway remain stalled, though a ceasefire between Israel and Lebanon has provided some marginal market relief.