The increase is more than 60% of the funds the bank had already set aside.
The announcement contrasts with its assertion in January that oil companies were "surprisingly resilient".
According to Deloitte, 175 US petroleum companies are at risk of bankruptcy this year, which would make it unlikely they could repay loans.
Marianne Lake, JP Morgan's chief financial officer, told an investor day in New York: "Since year-end, expectations for oil prices have worsened and stresses have continued to permeate the value chain."
US crude fell to  $31.87 a barrel on Tuesday and JP Morgan shares fell 4.3% after the announcement.
Ms Lake said half of the $500m was being set aside for a few corporate clients.
If oil prices hit $25 a barrel and remained in that range for 18 months, JP Morgan said it would set aside another $1.5bn.
The bank has $42bn in oil and gas loans in its portfolio, but that amount was less than 2% of the bank's total assets, according to data from September.
JP Morgan is not the only bank to increase its reserves to protect against oil and gas defaults: in January Wells Fargo raised its reserves by 70%.
The banks have warned that energy companies will face increased scrutiny over their loans. Lenders typically reassess oil and gas reserves in April and review the company's lines of credit and the bank's risk exposure.
JP Morgan said it was planning on starting that process sooner and could cut credit lines to some oil and gas companies by 15% to 20%.
JP Morgan will set aside an additional $500m (£357m) to cover potential losses from its exposure to the oil and gas sector.