Why Did Trump Change His Stance and Approve Releasing Oil Reserves? How Much Help Will It Be in Stabilizing Oil Prices?

To address the rising oil prices triggered by U.S. and Israel airstrikes on Iran, President Trump announced in an interview on March 11 that the United States will release its strategic petroleum reserves.

According to CCTV News, the U.S. Department of Energy stated that Trump has authorized the department to release 172 million barrels of crude oil starting next week. At the planned release rate, this amount will be delivered over approximately 120 days.

Some commentators believe this is the boldest move by the White House to lower oil prices since the U.S. declared war on Iran.

Earlier that day, the International Energy Agency (IEA) announced that its 32 member countries unanimously agreed to release 400 million barrels from strategic oil reserves to cope with the global oil supply tightness. This plan far exceeds the 182 million barrels collectively released after the Russia-Ukraine conflict erupted in 2022. Japanese Prime Minister Fumio Kishida also announced plans to release oil reserves before the IEA statement.

Trump’s Stance “Suddenly Changes”

Recently, international oil prices surged significantly due to Middle East tensions, approaching $120 per barrel at one point. High oil prices have led to continuous increases in domestic fuel prices in the U.S.

Data released by the American Automobile Association on the 11th showed that the national average price of regular gasoline continued to rise, reaching its highest level in over 20 months. On that day, the average price was $3.578 per gallon (about 24.6 RMB), a roughly 20% increase since February 26.

According to Axios, Democratic Senate leader Chuck Schumer criticized the U.S.-Israel military strikes on Iran for causing gasoline prices to spike and urged President Trump to use strategic petroleum reserves to stabilize prices.

“Because of Trump’s reckless and unnecessary war, gasoline prices have soared to multi-year highs,” Schumer wrote on X (formerly Twitter). “His response? ‘Let it rise,’ he doesn’t care at all.”

Under pressure, Trump had not previously expressed willingness to release oil reserves. According to U.S. and European officials familiar with the discussions, he had previously said the war with Iran “would end soon.”

The Wall Street Journal cited officials saying that Energy Secretary Chris Wirth conveyed the White House’s position to G7 officials on the morning of the 10th: since oil prices had recently fallen below $90 per barrel, it was too early for large-scale market intervention.

However, less than two hours later, U.S. officials changed their stance, urging G7 counterparts to agree to a large-scale release of oil. A senior U.S. government official said this shift was entirely due to Trump changing his mind.

This official stated that Trump was originally opposed to releasing the reserves on the 10th, but after advisors told him it was necessary to calm market volatility, he changed his mind and directed Wirth to push for market intervention.

At a rally in Kentucky on the 11th, Trump praised the IEA’s move. He has long criticized the Biden administration’s use of strategic reserves in 2022. The strategic petroleum reserve is one of the few measures the president can unilaterally decide to influence oil prices.

U.S. officials said the release was mainly driven by concerns that the Strait of Hormuz could be blocked for weeks or longer. The Strait of Hormuz accounts for about 20% of global oil supply. Multiple media outlets on the 10th cited sources saying Iran had begun laying mines in the strait. Analysts suggest that even if U.S. forces and others manage to clear Iran’s influence from the area, mine clearance could take a long time, potentially prolonging the impact.

The Wall Street Journal analyzed that this unpredictable stance reflects the White House’s indecisiveness regarding Iran military actions. “What’s shocking is that the core issue is the lack of preparedness for the energy market consequences—completely unprepared,” said Arnaub Dutta, head of policy implementation at Employ America, a research organization advocating for the use of strategic reserves.

Allied Countries Respond Hastily

European officials were reportedly shocked by Trump’s reversal but acted regardless.

The report also states that even before the February 28 bombing began, Iran had threatened to close the Strait of Hormuz if the U.S. launched an attack. Yet, officials did not prepare diplomatic measures for such intervention and responded hastily without prior consultation with key allies.

Within the Western camp, there were initial disagreements, with some countries like Germany, Europe’s largest economy, initially reluctant to support coordinated reserve releases. Meanwhile, Asian countries like Japan, which rely heavily on Gulf oil imports, actively supported the idea.

The IEA announced on the 11th that all 32 member countries agreed to release 400 million barrels from strategic reserves. This broke the usual protocol, as member countries typically require 48 hours to review proposals.

IEA Director Fatih Birol said the release would be implemented in phases based on each member’s specific circumstances and at appropriate times. The IEA will later publish detailed plans for the release and continue monitoring global oil and gas markets.

A European energy minister revealed that Japan would release 3.05 million barrels, Canada 2.36 million barrels, and Germany 1.95 million barrels. French officials said France would contribute 1.45 million barrels. Other members would contribute smaller amounts.

Germany announced participation in the coordinated release on the 11th. South Korean media reported that the Ministry of Trade, Industry and Energy decided to release the country’s largest-ever 2.246 million barrels of oil, in accordance with the IEA agreement.

Fumio Kishida had already decided before the IEA’s decision to start releasing Japan’s reserves as early as March 16, with an estimated total release of about 20% of domestic reserves. Japan plans to release both 15 days’ worth of private reserves and one month’s worth of national reserves, reaching the longest duration in history. According to Japan’s Ministry of Economy, Trade and Industry, the total is approximately 80 million barrels.

Since its establishment in 1974, the IEA has only coordinated five releases of strategic reserves, highlighting the severity of the current energy crisis—namely, in 1991 during President George H. W. Bush’s military action against Iraq, in 2005 after Hurricane Katrina halved U.S. Gulf production, in 2011 during NATO intervention in Libya, in March 2022 after the Russia-Ukraine conflict erupted, and in April 2022 amid ongoing conflict.

However, many remain skeptical whether the release of 400 million barrels will be enough to keep oil prices below $100 per barrel. Officials say this volume is only about 20 days of oil flow through the Strait of Hormuz. Details of the plan remain scarce, and the impact on prices will depend on the speed of release.

Will It Work?

According to the U.S. Department of Energy, the U.S. currently holds about 415 million barrels of oil in reserves, which is less than 59% of total capacity. The U.S. consumes roughly 20 million barrels daily, close to the usual daily flow through the Strait of Hormuz.

AP reports that the U.S. strategic reserves are stored in underground salt caverns in Texas and Louisiana. When needed, water is injected into the salt caverns to float the oil to the surface for extraction, then transported via pipelines to refineries.

The Department of Energy states that the goal is to release up to 4.4 million barrels daily within 13 days of a presidential decision. However, analysts suggest physical constraints may limit actual release speeds to around 2 million barrels per day.

After the Biden administration used strategic reserves to stabilize the oil market amid the Russia-Ukraine conflict, the Trump administration only replenished a small portion of the reserves. Meanwhile, the Biden releases damaged some storage caverns, slowing re-stocking efforts.

Politico reports that the DOE’s statement had little effect on U.S. oil futures, which continued to rise in evening trading, nearing $94 per barrel.

Wirth told Fox News on the evening of the 11th that shipping through the Strait of Hormuz would “resume within the next few weeks,” well before the U.S. completes its planned release of strategic reserves. “I believe we will have the Strait back open before then. When exactly? I can’t say, but we are working around the clock to achieve this,” Wirth said.

However, some experts believe that if Middle East conflict persists, releasing reserves and injecting additional supply into the market may not solve the problem. Kato Macro’s Chief Global Economist Neil Shearing pointed out that closing the Strait of Hormuz would cut off about 10 million barrels daily, but even the largest reserve releases in history could only supply about 2.5 million barrels per day.

Shearing emphasized that the ability to transport additional oil to needed areas is also critical: “The amount you can release is limited by pipeline capacity. Longer-lasting conflicts could cause supply shortfalls that exceed what the IEA’s reserves can fill.”