The United States does not plan an immediate release crude from the Strategic Petroleum Reserve (SPR) as a means to mitigate the effect of the Iran war on global oil prices and domestic fuel prices, a source with knowledge of the matter has told Bloomberg.
Late on Monday, U.S. Secretary of State Marco Rubio said the United States would unveil on Tuesday a phased plan to mitigate the spike in oil prices amid the ongoing conflict in Iran and the wider Middle East.
The U.S. knew that oil prices would spike after the weekend in which attacks on Iran began, Secretary Rubio said.
“We knew that going in would be a factor. And so we have a program in place that will begin to be implemented by Secretary Wright, Secretary Bessent,” Rubio said, referring to Energy Secretary Chris Wright and Treasury Secretary Scott Bessent.
“And starting tomorrow you will see us rolling out those phases to try to mitigate against that,” Secretary Rubio added.
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According to Bloomberg’s source, there is no immediate plan to tap the SPR.
The Trump Administration has worked over the past year to fill the reserve that was depleted in 2022 with releases in the aftermath of the Russian invasion of Ukraine and the subsequent oil price spike to above $100 per barrel. Trump Administration officials have often criticized the previous administration of former President Joe Biden of letting the SPR levels fall so low.
The U.S. Strategic Petroleum Reserve (SPR) 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.
Should the President order an emergency sale of SPR oil, the Department of Energy would be prepared to begin deliveries of oil into the market within 13 days. 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. At 1 million barrels per day, the Reserve can release oil into the market continuously for nearly a year and a half, the DOE says.
By Tsvetana Paraskova for Oilprice.com
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