Strategic Oil Reserve Purchase Set to Support Crude Demand through 2028

Governments are set to buy millions of barrels of oil through 2028 to rebuild emergency reserves depleted by drawdowns to plug a gap in global supply caused ‌by the U.S.-Israeli war on Iran, analysts and officials said. This could boost demand for crude that would absorb some of the expected global supply surplus following OPEC+'s decision to increase output, they say.

Governments drew down emergency reserves after supply disruptions linked to the conflict removed an estimated 1.5 billion barrels from global inventories this year, according to calculations based on International Energy Agency, OPEC and U.S. Department of Energy data.

The IEA coordinated a record 400 million-barrel release after disruptions in the Strait of Hormuz drove crude prices sharply higher. Brent crude rose above $126 a barrel in late April and U.S. crude approached $120 in early March. Replenishing those reserves could add up to 664,000 barrels per day of demand by third quarter 2027, according to commodities analytics firm Kpler, helping to soak up some of the excess supply expected next year as OPEC+ continues to unwind production cuts. This would curb price falls.

"Strategic Petroleum Reserve (SPR) restocking will lead to a higher price floor in 2027," said Christopher Haines, head of oil at consultancy Energy Aspects.

Refilling reserves could generate an additional 506,000 bpd of crude demand in the fourth quarter of 2026, rising further next year, said Michelle Brouhard, ‌head of policy and geopolitical risk at Kpler.