Trump Draws from Strategic Petroleum Reserve Following Iranian Attacks on Shipping

U.S. Responds to Strait of Hormuz Crisis with Major Oil Reserve Release

In response to Iran's recent attacks on ships navigating the Strait of Hormuz, President Trump has directed the release of 172 million barrels from the Strategic Petroleum Reserve. This action aims to stabilize the global oil market amid significant supply disruptions caused by the escalating conflict in the region.

This release is part of a broader initiative coordinated by the International Energy Agency (IEA), which earlier this week announced plans to collectively release up to 400 million barrels of oil from member nations’ reserves.

Details of the Oil Release

According to a statement from U.S. Energy Secretary Chris Wright, the release will begin next week and continue for approximately 120 days.

“Today, all 32 IEA member countries unanimously agreed to President Trump’s proposal for a coordinated release of 400 million barrels of oil and refined products to help lower energy prices,” Wright explained. “The Department of Energy is set to release 172 million barrels from the Strategic Petroleum Reserve, starting next week, with the full delivery expected over the next four months.”

Market Reaction and Reserve Status

Oil prices initially dropped earlier in the week on news of the IEA’s historic emergency release, but quickly rebounded as Iranian attacks on vessels intensified, signaling that disruptions in the Strait of Hormuz could persist longer than anticipated.

The U.S. Strategic Petroleum Reserve currently contains around 415 million barrels of crude oil, which is less than 60% of its total 714 million barrel capacity. The reserve has been gradually replenished after significant drawdowns in 2022, which were implemented at the onset of Russia’s invasion of Ukraine.

The Department of Energy noted that oil can be withdrawn from the reserve at a maximum rate of 4.4 million barrels per day for up to 90 days. After this period, the withdrawal rate decreases as storage caverns are depleted.

By Irina Slav for Oilprice.com