The US is set to release 172 million barrels of oil from its strategic petroleum reserve in an effort to lower energy prices during the Iran war, Energy Secretary Chris Wright has said.
The announcement follows a similar one from the International Energy Agency, in which member nations agreed to a co-ordinated release of 400 million barrels of oil from their reserves.
Crude oil prices nevertheless closed higher as traders continued to monitor disruptions in the Strait of Hormuz. Brent crude futures closed 4.76 per cent higher at $91.98 a barrel, while US crude was up 5.98 per cent at $92.47 a barrel.
Mr Wright said the Energy Department will begin tapping into the US oil stockpile next week, and that it would take about 120 days to deliver “based on planned discharge rates”.
President Donald Trump's directive is a similar one made by his predecessor Joe Biden at the start of Russia's invasion of Ukraine in 2022, when oil prices climbed to about $120 a barrel. Wild fluctuations in energy markets brought oil prices back to that level this week before falling to about $90 a barrel.
“The United States has arranged to replace these strategic reserves with approximately 200 million barrels within the next year,” Mr Wright said.
Mr Trump previewed the move in an interview with a local television station in Cincinnati, during which he said his administration plans to tap into the reserve “a little bit”.
The latest action comes as an effective closure of the Strait of Hormuz threatens to significantly limit the global energy supply chain.
The conflict is having other knock-on effect, with Iranian attacks forcing Iraq to shut down production at its largest oilfield. The Abu Dhabi National Oil Company has said its operations continue “despite current regional developments”.
Iran threatened on Wednesday that the world should be prepared for oil to reach $200 a barrel as its forces continue to target ships on the strait.
Saudi Aramco is rerouting its crude exports through a pipeline to its Red Sea terminal, while the US has waived sanctions on Russian crude to relieve some pressure on energy markets.
Aramco chief executive Amin Nasser warned earlier this week that there would be “catastrophic consequences” if disruption in the key waterway continues.
