In an effort to stem a global oil rally that is driving up gas prices, the Trump administration is taking part in a record‑breaking, multinational release of oil from its strategic stockpiles.
On Wednesday, the International Energy Agency said its 32 member nations had agreed to release a total of 400 million barrels from their emergency reserves, the largest such effort in its history, “to address disruptions in oil markets stemming from the war in the Middle East.”
And the U.S. Department of Energy confirmed that the U.S. would be releasing 172 million of the estimated 415 million barrels in its Strategic Petroleum Reserve (SPR).
Can the Move Bring Down Gas Prices?
Brent crude, the global benchmark, was sitting at under $70 per barrel before the beginning of Operation Epic Fury on February 28. But Iran retaliated to the U.S.-Israeli strikes by effectively closing off the Strait of Hormuz, through which around a fifth of global seaborne oil trade passes, pushing this up to nearly $120.
While prices dropped close to $90 on Trump suggesting that the conflict would be over soon, these have now surged back to around $100 a barrel despite Wednesday’s multi-nation announcement.
As experts told Newsweek previously, a $10 increase in the price of oil typically drives up the cost of regular gas by around 25 cents a gallon, and gas prices have risen sharply in March, now averaging more than $3 in every state, according to the American Automobile Association (AAA).
The Department of Energy said releasing 172 million barrels from the U.S. reserves would commence next week and take “approximately 120 days to deliver based on planned discharge rates.” And the move could theoretically work as a price‑smoothing tool, curbing price increases and the amount Americans are paying at the pump.
Releasing reserves from the SPR increases the total amount available to the market, reducing prices through typical supply-demand mechanisms. However, the SPR contains crude oil, rather than finished gasoline, meaning the effect is indirect. And U.S. consumption, roughly 20 million barrels per day, per the Energy Information Administration, limits the size of any sustained price impact from a 172 million-barrel release.
In 2022, when Russia’s invasion of Ukraine caused significant disruption to global oil flows, the Biden administration released 180 million barrels over the course of six months, as other nations released 60 million.
A Treasury Department analysis, cited by USAFacts, estimated that this cut gas prices by around 13 to 31 cents per gallon from March to July of 2022, compared with where prices otherwise would have been.
Accounting for the actions from America’s IEA partners, a separate Treasury study put the total impact on retail gasoline prices at 17 to 42 cents per gallon.
What People Are Saying
U.S. Energy Secretary Chris Wright said: “President Trump promised to protect America’s energy security by managing the Strategic Petroleum Reserve responsibly and this action demonstrates his commitment to that promise.”
IEA Executive Director Fatih Birol said: “The oil market challenges we are facing are unprecedented in scale, therefore I am very glad that IEA Member countries have responded with an emergency collective action of unprecedented size. Oil markets are global so the response to major disruptions needs to be global too.
“Energy security is the founding mandate of the IEA, and I am pleased that IEA Members are showing strong solidarity in taking decisive action together.”
What Happens Next
The IEA and U.S. announcements on Wednesday failed to offset the ongoing rally in oil prices, which are now up over 30 percent since before Israel and the U.S. first launched strikes on Iran.
On Thursday, Iran said it would continue blocking transit and targeting ships in the Hormuz Strait, according to a statement attributed to the country’s new supreme leader, Mojtaba Khamenei, and read on state TV, the BBC reports.