Jennifer A. Dlouhy, Bloomberg
June 24, 2025
(Bloomberg) – Trump administration officials considered a range of options in case of a major oil supply disruption in the Middle East ahead of the U.S. strikes on Iran and President Donald Trump’s ceasefire declaration, according to people familiar with the matter.
The odds of needing to employ those strategies diminished Monday evening after Trump announced that Israel and Iran had agreed to a tentative truce.
However, it was unclear Tuesday morning whether — and how long — that ceasefire might endure. Tensions remain high in the region that accounts for nearly a third of the world’s oil.
The discussion of potential interventions — described as beginning weeks before Saturday’s attacks — underscores the seriousness with which Trump and his top advisers are weighing the risk of strained oil supplies and higher prices.
Options that have been discussed include a potential release of some crude from the nation’s emergency stockpile, which can be done unilaterally or in concert with other nations in cooperation and the International Energy Agency, said people familiar with the matter who asked not to be named in order to speak candidly.
However, the Strategic Petroleum Reserve has been depleted to about 400 million barrels of crude, a little more than half its capacity after drawdowns under former President Joe Biden that were assailed by Trump and congressional Republicans.
Analysts have warned even a strategic release of emergency crude would do little to offset the loss of millions of barrels flowing daily through the Strait of Hormuz, should its narrow shipping lanes be disrupted.
The president has made countering consumer prices a hallmark of his second term, and the cost of oil — as well as the gasoline and jet fuel made from it — is a key contributor to American household bills.
On Monday, Trump took to social media to implore: “EVERYONE, KEEP OIL PRICES DOWN. I’M WATCHING!” The president aimed a second post at the Department of Energy, telling it to “DRILL, BABY, DRILL,” adding: “And I mean NOW!!!”
By Tuesday morning, Trump was celebrating the fall in oil prices tied to cooling tensions in the Middle East and hopes the ceasefire would hold.
“I love it. It dropped almost $10 yesterday,” Trump told reporters on Air Force One Tuesday morning. “We have a lot less conflict, so it came down.”
The administration is using every tool available to maintain lower prices, increase economic and national security and sustain its energy dominance, a senior administration official said. While the administration isn’t currently seeing interruption to oil flows, the many tools at Trump’s disposal should offer reassurance, the official said.
Other options could include royalty relief for oil companies with drilling rights and wells on federal land, a bid to encourage them to bolster output. Waivers of fuel specifications like those previously employed by the Environmental Protection Agency after storm-related disruptions to domestic refining and shipments also could be on the table as a way to unlock the flow of gasoline and other refined fuels if necessary, the people said.
A president also could invoke special powers under the 1950 Defense Production Act to compel U.S. companies to supply more oil. Presidents have used that Cold War-era law to unlock energy supplies in the past, including to compel the refurbishment of oil tankers in the 1960s and divert contracted oil to the military in the 1970s.
The statute empowers presidents to direct companies to accept — and prioritize — contracts for materials and services deemed critical for national defense. That same authority could be used to force contracts for oil and fuel deliveries if deemed essential.
That kind of intervention would be a “dramatic intervention into upstream investment” by oil companies, even for a president who has expansively used emergency powers in office, said Kevin Book, managing director at Washington-based research firm ClearView Energy Partners LLC.
Historically, however, there’s been significant cooperation between the oil industry and government in times of need, Book added.
Oil industry officials have celebrated Trump’s early moves to make more territory available for development, while scrapping policies that suppress demand for liquid fuels and easing regulations that raise their operational costs.
Energy Secretary Chris Wright said Monday evening on Fox News that despite predictions that “over $100 oil is just around the corner,” prices have dropped amid the conflict, a decline he attributed to Trump’s “energy dominance agenda.”
