President Trump has ordered the release of 172 million barrels from the strategic petroleum reserve to cushion the blow to global oil supply from the paralysis of the Strait of Hormuz as Iran starts striking vessels in the passage.
The release will be part of the larger release of up to 400 million barrels announced by the International Energy Agency earlier this week.
In a statement, U.S. Energy Secretary Chris Wright said the release will begin next week and last for 120 days.
“Earlier today, 32 member nations of the International Energy Agency unanimously agreed to President Trump’s request to lower energy prices with a coordinated release of 400 million barrels of oil and refined products from their respective reserves,” Wright said.
“As part of this effort, President Trump authorized the Department of Energy to release 172 million barrels from the Strategic Petroleum Reserve, beginning next week. This will take approximately 120 days to deliver based on planned discharge rates.”
Oil prices fell earlier this week on reports that the IEA was discussing the largest emergency release in history, but later reversed course amid Iranian strikes on ships trying to pass the Strait of Hormuz, suggesting the disruption in traffic via the chokepoint will last longer than hoped.
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The U.S. strategic petroleum reserve currently holds about 415 million barrels of crude. Out of a capacity of 714 million barrels, it is less than 60% full at present as the U.S. has slowly rebuilt reserves following the major releases in 2022 at the start of the Russian invasion of Ukraine.
Oil can be pumped from the reserve at a maximum rate of 4.4 million barrels per day for up to 90 days, then the drawdown rate begins to decline as storage caverns are emptied, the Department of Energy said earlier this month.
By Irina Slav for Oilprice.com
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