Trump administration taps emergency oil reserves to address rising oil prices, market disruptions
The Trump administration said Wednesday, Mar. 11, that it will release 172 million bbl of crude from the US Strategic Petroleum Reserve (SPR), part of a broader International Energy Agency (IEA) effort to release 400 million bbl from emergency stockpiles to ease oil prices that surged after the US launched its war against Iran.
President Trump said the move is intended to help lower prices, while Energy Secretary Chris Wright said drawdowns will begin next week and continue for about 120 days.
The decision marks a reversal from the administration’s earlier reluctance to tap the SPR.
Oil prices have climbed sharply as Iranian attacks on tankers in the Strait of Hormuz disrupted flows through the key chokepoint. Despite the announcement, US crude futures continued to rise, nearing $94/bbl in evening trading.
The SPR currently holds about 415 million bbl, or less than 59% of capacity. Wright said the administration plans to replace the released barrels with 200 million bbl over the next year, arguing the action balances near-term market needs with long-term energy security.
Although the SPR is designed to release up to 4.4 million b/d, analysts say actual flows are likely to fall well short of that ceiling based on physical constraints and historical precedent, with even optimistic estimates topping out around 2 million b/d.
About the Author
Conglin Xu
Managing Editor-Economics
Conglin Xu, Managing Editor-Economics, covers worldwide oil and gas market developments and macroeconomic factors, conducts analytical economic and financial research, generates estimates and forecasts, and compiles production and reserves statistics for Oil & Gas Journal. She joined OGJ in 2012 as Senior Economics Editor.
Xu holds a PhD in International Economics from the University of California at Santa Cruz. She was a Short-term Consultant at the World Bank and Summer Intern at the International Monetary Fund.