Fuel stocks and strategic reserves: Economics

Costly insurance that pays out only in a crisis

What this tab covers Economics and financial structure: capital versus operating cost, levelised cost of storage, and how the asset earns money.

Strategic stocks are insurance: costly to build and fill, rarely profitable, and valued for the price spikes and shortages they prevent.

Capex versus opex

Mixed

The US has invested about USD 25.7 billion in the SPR, of which USD 5 billion went on facilities and USD 20.7 billion on crude, so facilities cost about USD 7 per barrel of capacity (calculated). In June 2026 India directed ONGC to build a further 1.75 Mt of crude storage at Mangalore for about USD 1.6 billion, roughly USD 125 per barrel (calculated, assuming about 7.3 barrels per tonne; the report does not say whether this includes crude). Operating costs are mainly maintenance, as the US life-extension backlog shows.⁴⁹

US SPR investment to date USD 25.7 bn (USD 5 bn facilities, USD 20.7 bn oil)⁴ US facilities per barrel of capacity about USD 7 (calculated)⁴ India Mangalore extension 1.75 Mt for about USD 1.6 bn (2026)⁹

Levelised cost of storage (holding cost)

Mixed

A levelised cost per MWh delivered is rarely published for strategic stocks, because they may sit unused for years and the oil itself is the main cost. The useful comparison is the cost of holding stocks against the cost of a shortage: in 2026 crude rose above USD 100 a barrel and the IEA judged its stock release, the largest in its history, essential to cushioning the shock.³

Crude price in 2026 shock above USD 100/barrel³

Revenue stack and market participation

Mixed

Public stocks earn little directly; value comes from avoided economic damage, and sometimes from selling high and refilling low. Other models: obligated industry stocks (most of Europe's share of the 2026 release), exchange or loan deals (the US offered companies 40 million barrel loans in 2026), and leasing space to producers, as India does with ADNOC, which aims to hold up to 30 million barrels in Indian reserves. Commercial gas storage earns from summer-winter price spreads; EU filling rules exist because those spreads alone did not secure winter supply.¹⁵⁹

US SPR loan offer (2026) 40 million barrels⁵ ADNOC crude in Indian SPR (target) up to 30 million barrels⁹ Europe release, obligated industry share 74.8 of 107.5 million barrels¹

Sources

Update on IEA collective action decision of 11 March 2026 International Energy Agency, 2026
Sheltering From Oil Shocks: Summary International Energy Agency, 2026
SPR Quick Facts US Department of Energy, 2026
Oil stocks in US Strategic Petroleum Reserve fall to lowest level since 1982 (Reuters) BOE Report, 2026
India taps ONGC to accelerate SPR expansion amid global oil supply disruption S&P Global Commodity Insights, 2026