Photograph by Nathaniel St. Clair
Last June 17, 2026 Trump announced the US and Iran had agreed to a Memorandum of Agreement (MOU) and a ceasefire in the war. The global price of crude oil fell almost immediately—from the $100 per barrel range at which it hovered throughout April and May to $67 for West Texas Crude (WTI) and $70 for Brent crude.
The retail price of gasoline in the US—which had surged from $2.92/gallon nationwide for regular grade gas before the war to the $4.50/gallon range at its peak—cost the American consumer $69 billion in additional out of pocket expense for the four months, March through June.
The MOU did not last long. Within days it began collapsing and in early July both sides declared it was dead. Military attacks by both sides thereafter re-commenced and have escalated steadily ever since. So too has the price of gas at the pump again, as crude oil now exceeds $90/barrel and rising.
As the media story goes in the New York Times and Washington Post legacy media in America, Trump responded and agreed to an MOU as result of the pressure from US oil company CEOs who, in early June 2026, went public and warned Trump US oil stockpiles and reserves were running critically low and would disappear in another 3-4 weeks. That would send the spot price of crude well above $150/barrel and gas at the pump to $8/gallon or more! So Trump proposed the MOU to Iran mid-June. The tentative deal on June 17 immediately drove the price of crude down to $67/barrel and shaved 50 cents or more a gallon off the price of gasoline at the pump.
But is this narrative correct?
Was the Iran war really leading to US oil reserves collapsing, causing a severe shortage that was about to drive retail gasoline prices through the roof? Or was the MOU a deception and a tactic to set up a larger military conflict with Iran that is now unfolding?
Let’s look at some facts of the past five months about US crude oil stockpile reserves, US crude production, US crude oil exports and imports, as well as US refinery capacity and gasoline and distillate fuel inventories since February 28, 2026.
Official Data on Oil Reserves, Production & Exports
According to the sources US Energy Information Administration and the private economic research firm, tradingeconomics.com, US commercial oil stock reserves on February 27, 2026 amounted to 439 million barrels. In the first six weeks of military conflict from that date through April 17, US commercial stockpiles of crude rose to 465 million barrels. Thereafter a mild drawdown occurred and by July 17, 2026 the commercial reserves were still 411 million barrels. That latter number represented a mere 6% below the preceding five year average of commercial reserves. Hardly seems like a major commercial stockpile shortage. Or, for that matter, a shortage justifying a $1.50/gallon rise in the price at the pump and $69 billion cost to consumers!
1. Maybe the commercial reserves were not at crisis levels but the Trump administration’s authorization of a release from the US Strategic Petroleum (SPR) reserve reflected a shortage offset by government oil supplies from the big SPR storage facilities in Big Hill and Bryan Mound, Louisiana.
At the start of the war, the SPR held 415 million barrels. That was already down from its 714 million barrel capacity due to the Biden administration’s release of 300 million barrels after its disastrous inflation and war policies. But that 300 million was all before the Iran war.
By April 17, 2026 the SPR had been drawn down by only 10 million barrels, to 405 million. The drawn down of the SPR didn’t begin until May. By June 26 the SPR reserve was 325 million barrels. Note this fact: the SPR draw down was in May to early June. That’s when the price of crude per barrel was hovering around $100 per barrel—bouncing around a few days lower as Trump falsely announced an end to the conflict no less than 14 times by various accounts—in order to prevent the price surging to more than $100. As Trump manipulated the markets with his announcements, the crude oil price fell $10 to $20 barrel each time, only to rise quickly again after a few days every time he manipulated the markets.
Since June 26 the SPR reserve has continued at around 320 million barrels. On July 17 it was 314 million, down from 325 nearly a month before. In other words, there was little further draw down of the SPR the past month, mid-June to mid-July. Just as there was little draw down from February 28 through April 17. The actual drawn down—about 100 million barrels—occurred between April 17 and June 17. As we’ll see the timing of that drawn down to the period between April 17 and June 17 is important.
The draw down coincided when the price of crude oil hovered consistently around $100 per barrel!
The SPR Oil Company Profit Scam
When the US government releases crude oil supply from the SPR it doesn’t charge the oil companies anything for the oil. They get the oil for free. No cost. They then can sell it for export at the then prevailing market price—i.e. $100 per barrel or more if April to June 17. Or, they can refine it and sell it in the US domestic market—again at the $4.50/gallon price instead of prior $2.92/gallon. In both cases there’s no costs of production for the drilling and other pre-refinery production. And if for export, no costs of production at all. Lower or no cost mean windfall profits.
In the first quarter of 2026 the 27 major US oil companies reported windfall profits of $40 billion. That was before the Iran war and the price escalation. Soon they’ll report second quarter 2026 profits. Analysts except that to be $60 to $80 billion additional profit windfall.
So the US big oil companies in just the first half will realize more than $100 billion further profit from the Iran war. While the US consumer puts out $69 billion and cuts other spending and/or his savings by that amount.
Who says war is not profitable! And who wants it to continue? And this is not to mention the Weapons companies of the Military Industrial Complex. Or the financial speculators who got pre-notice of Trump’s market price manipulation announcements—which include his friends and family businesses who placed speculative bets on oil price swings since February 2026!
The SPR oil company profits scam—where they wait to take SPR free oil at $0 dollar cost until it reaches $100 per barrel and more and then sell it at 100% profit—is just one of many ways that capitalists of various ilk have been exploiting the war.
Defenders of the SPR scam will argue the oil companies don’t realize 100% profit. They have to return the free oil from the SPR at a higher rate that they received. Typically they are required to return 1.2 barrels for every 1 barrel they take. True. But they can wait up to two years to replace the 1.2 barrels. So they wait until the price per barrel falls more than 20% in order to pump their own oil to send to the SPR.
This is not unlike ‘short selling’ stock market shares by speculators. In a short sale, the financial speculator capitalist takes possession of a share of stock and technically ‘sells’ it. When the price of the stock then collapses he ‘buys’ the stock at the much lower price. So he buys it low and (pre) sells it high. The difference is the speculative profit. He doesn’t actually take possession of anything. It’s all an accounting manipulation, except for the profit at the end which he gets to bank in his account. That’s real.
In similar fashion, the Oil company waits until the price per gallon is high, only then ‘takes’ the oil from the SPR. Sells it at the peak market price. Then waits until the price collapses and replaces the oil at the low market price. Even if the replacement is 1.2 to 1, the profit difference is when the lower replacement price is less than 20%. US oil companies took and sold SPR oil at $100 or more per barrel. They have two years to replace it at less than $80. The difference is pure profit. Should a recession occur within two years, the price per crude will certainly fall to $50 or less.
Other Evidence of No Oil Shortage
The oil companies in the meantime gouge the US consumer at the retail level for gasoline, home heating oil, and diesel.
If there was a true supply shortage, why has US crude oil production not changed at all during 2026 and the war?
From our same sources, on February 27, daily US crude oil production in the US was 13.7 million barrels. On April 17 13.6. On June 26, it was 13.8. Since June it has been steady at 13.8 million barrels. So the shortage is not due to US crude oil production. And, as we saw, not due to oil company commercial crude oil reserves.
So where has the SPR oil supply (100 million barrel draw down April-June) gone? Try US oil companies’ US oil exports. The dollar value of those exports rose from $7.8 billion for the month of February 2026 before the Iran war to $17.1 billion in April 2026 to $19.1 billion in May. (June is not yet available but almost certainly will exceed $22 billion).
An argument can thus be made the SPR release plus the US companies’ crude output increase has gone to exports. While some of the dollar value increase is no doubt due to the rising price of US crude exports, some of that is also due to the increase volume of crude exports.
And not just crude oil exports. Refined oil product exports have risen in quantity and price as well. US Refinery capacity rose from 89% in February 2026 to 96% in July. That increase in refinery output should have increased the supply of gasoline, distillates, etc. and thus reduced the price for consumers at the pump but didn’t. (More supply means lower price).
Gasoline and distillate inventories fell slightly despite the US refinery production rise from 89% to 96% capacity.
According to the Wall St Journal of July 9, 2026, US gasoline inventories fell from 253 million barrels on February 27 to 212 million on July 9. And distillate inventories from 120 to 103 million barrels. In both cases, not much a decline or shortage from prior five year average levels, but certainly not enough of a supply shock to justify a 50% increase or more in the cost per gallon for gasoline and diesel fuel!
Conclusions:
The data for both US crude oil production and reserves (commercial or SPR) simply don’t indicate there’s been a crisis in oil supply shortage in the US.
US crude production and commercial reserves don’t support that view.
The US SPR release is actually a profits scam to enrich the oil companies, who will have realized windfall profits of more than $100 billion in just the first six months of 2026.
In contrast, US households have paid out of pocket $69 billion. US businesses more.
Much of the SPR free oil was likely re-exported by the US oil companies at significant profit.
US oil companies’ refinery output should have increased the supply of gasoline and distillates but didn’t. That moderate refined oil output increase was also likely mostly re-exported.
There is not now, nor has there been a supply shortage of either crude oil or refined oil products in the US. It’s all a Trump-Media-MIC misrepresentation of facts to justify a grand scale rip-off and exploitation—as all wars are.
Now that the Iran war has resumed as a hot war in July, the process of exploitation of consumers, oil price manipulation and speculation, and oil company profits windfalls will repeat in the second half of 2026.
