Updates with decision from Trump
President Donald Trump said his administration will draw down the US Strategic Petroleum Reserve (SPR) "a little bit", after the IEA announced a coordinated release of 400mn bl of oil.
The 32 member countries of the IEA voted unanimously on Wednesday in support of the largest-ever oil release in response to disruptions to supplies arising from the US-Israel war with Iran. The planned release would represent a third of the IEA members' 1.2bn bl in reserves. Trump said on Wednesday the US would release crude from the SPR.
"We'll do that, and then we'll fill it up," Trump said during an interview in Ohio with television station WKRC. "I filled it up once, and I'll fill it up again, but right now, we'll reduce it a little bit, and that brings the prices down."
The US has the largest emergency oil reserves of any IEA member — the SPR holds 415.4mn bl of crude — and it has participated in every coordinated release since the IEA was created. Japan and the UK have already committed to releasing 80mn bl and 13.5mn bl, respectively, but the US has yet to provide any details on the size or timing of its release.
Hours earlier, administration officials had indicated that US participation in the coordinated IEA release was not guaranteed, even though the US had supported the vote to make a coordinated release.
"Clearly whether the US participates is up to President Trump, he'll make the final decision on that," US interior secretary Doug Burgum said in an interview on CNBC.
Trump has recently said he was aware that launching military strikes on Iran would cause oil prices to rise, but he has downplayed the effect on US consumers, even as fuel prices surged in the wake of the attacks. US retail diesel prices rose by nearly $1/USG in the week ending on 9 March, the highest weekly increase on record, according to federal data.
"Prices are coming down very substantially, oil will be coming down, that's just a matter of war," Trump said.
An emergency release from the SPR would represent an acknowledgment from the Trump administration that its strikes on Iran are likely to have a long-term effect on global energy markets, rather than the short-term effect it expected. The administration has spent the last week downplaying the need for an SPR release.
"We're more than happy to use that if it's needed," US energy secretary Chris Wright said in an interview with CBS on 8 March. "It's a logistics issue. Where do they need oil? They need oil at refineries in Europe and in Asia."
Democrats have attacked Trump for launching strikes against Iran without making it a priority to refill the SPR, or to secure the strait of Hormuz. Last year, his administration bought just 900,000 bl of crude for the SPR, despite Trump saying in his inaugural address he wanted to refill the SPR to the "top" of its capacity. The tax law Trump signed into law only had enough funds to pay for about 3mn bl of crude, or about 1pc of what would be needed to refill the SPR to its authorized capacity of 714mn bl.
Republicans have blamed Democrats for the depleted state of the SPR, which is now filled to 58pc of capacity. Senator Tom Cotton (R-Arkansas) wrote on Wednesday that Democrats had "undermined" the SPR by declining to provide billions of dollars to refill the reserve during Trump's first term.
Cotton also faulted former president Joe Biden's release of 180mn bl of crude from the SPR in 2022, during an oil price spike caused by Russia's invasion of Ukraine.
