More and more reservoirs are being build or planned in order to help meet the increasing water demand all over the world. However, is building new reservoirs always helpful to water supply? To address this question, the river routing module of Global Change Assessment Model (GCAM) has been extended with a simple yet physical-based reservoir scheme accounting for irrigation, flood control and hydropower operations at each individual reservoir. The new GCAM river routing model has been applied over the global domain with the runoff inputs from the Variable Infiltration Capacity Model. The simulated streamflow is validated at 150 global river basins where the observed streamflow data are available. The model performance has been significantly improved at 77 basins and worsened at 35 basins. To facilitate the analysis of additional reservoir storage impacts at the basin level, a lumped version of GCAM reservoir model has been developed, representing a single lumped reservoir at each river basin which has the regulation capacity of all reservoir combined. A Sequent Peak Analysis is used to estimate how much additional reservoir storage is required to satisfy the current water demand. For basins with water deficit, the water supply reliability can be improved with additional storage. However, there is a threshold storage value at each basin beyond which the reliability stops increasing, suggesting that building new reservoirs will not help better relieve the water stress. Findings in the research can be helpful to the future planning and management of new reservoirs.