Oil Prices Surge Past $90 As Trump Downplays Strategic Petroleum Reserve Use Amid Iran War
Oil prices are climbing sharply as the widening war involving the United States, Israel, and Iran disrupts some of the world’s most critical energy supply routes, raising concerns about long term instability in global fuel markets.
Within days of the attacks, oil markets surged. U.S. benchmark crude settled at $90.90 per barrel Friday, representing a roughly 36 percent increase from a week earlier. Brent crude, the international benchmark, rose to $92.69 per barrel, up about 27 percent over the same period.
The rapid increase reflects growing fears that the war could interrupt major energy flows from the Middle East. Ships carrying an estimated 20 million barrels of oil per day have struggled to move through the Strait of Hormuz, the narrow passage connecting the Persian Gulf to the open ocean. The waterway, bordered by Iran, is one of the most strategically important shipping corridors in the global oil trade.
Damage to refineries, pipelines, and liquefied natural gas facilities across the region has also tightened supply. Iran’s retaliatory attacks have struck energy infrastructure in Saudi Arabia and Qatar, forcing temporary shutdowns and reducing global output.
Energy analysts estimate that roughly 9 million barrels of oil per day have already been removed from the global market as facilities shut down or producers scale back operations as a precaution.
Claudio Galimberti, chief economist at Rystad Energy, said the sudden disruptions have created an extreme supply deficit.
“Right now, with all of this shut in, we are in a situation of extreme deficit,” Galimberti said.
Trump Downplays Calls to Use Strategic Petroleum Reserve
Despite the rapid rise in prices, Donald Trump signaled that he is not currently considering releasing oil from the Strategic Petroleum Reserve to calm markets.
Speaking to reporters aboard Air Force One on Saturday, Trump said the United States has ample energy resources and suggested the market would stabilize on its own.
“We’ve got a lot of oil. Our country has a tremendous amount,” Trump said. “There’s a lot of oil out there. That’ll get healed very quickly.”
Releasing oil from the Strategic Petroleum Reserve is one of the few direct actions available to a president to attempt to influence gasoline prices in the short term. By injecting additional supply into the market, the government can sometimes ease pressure on prices, particularly during supply disruptions.
But Trump instead used the moment to criticize his predecessor for drawing down the stockpile in recent years.
Former President Joe Biden ordered large withdrawals from the reserve in 2022 following Russia’s invasion of Ukraine, pushing the stockpile to its lowest level since the 1980s. Trump has repeatedly argued that those releases weakened the nation’s emergency reserves.
He said his administration plans to begin replenishing the stockpile again when he believes conditions are right.
Trump described the timing as largely intuitive. “That’s basically a gut instinct,” he said.
What the Strategic Petroleum Reserve Is and How It Works
The Strategic Petroleum Reserve is the largest emergency crude oil stockpile in the world. It consists of underground salt caverns located along the Gulf Coast in Texas and Louisiana.
These caverns can hold more than 700 million barrels of crude oil, though the reserve is not currently filled to capacity. As of the end of last month, the reserve held just over 415 million barrels, according to the U.S. Department of Energy.
The reserve was established in the aftermath of the 1973 Arab oil embargo, which exposed the vulnerability of the U.S. economy to sudden supply disruptions.
At its peak more than a decade ago, the reserve held approximately 726 million barrels of oil.
Presidents have periodically authorized withdrawals during major emergencies. In 1991, President George H. W. Bush ordered the release of nearly 34 million barrels during the Gulf War, though only about 17 million barrels were ultimately used.
President Barack Obama authorized the release of 30 million barrels in 2011 to offset supply disruptions following unrest in Libya.
More recently, Biden released large volumes in 2022 to counter rising energy prices following Russia’s invasion of Ukraine.
To withdraw oil from the reserve, water is pumped into the underground caverns. Because oil is lighter than water, the crude floats upward and can be captured and transported through pipelines to refineries.
Rising Gas Prices Already Hitting American Drivers
Although the United States now exports more petroleum than it imports, American consumers remain highly vulnerable to fluctuations in global oil markets.
Oil is traded internationally, meaning domestic production does not shield the country from price spikes when supply disruptions occur overseas.
The impact is already being felt at gas stations nationwide.
The average price for regular gasoline reached $3.41 per gallon Saturday, up about 43 cents in a single week, according to AAA. Diesel prices rose even faster, climbing roughly 75 cents to $4.51 per gallon.
Fuel costs are especially burdensome for lower income households because transportation often consumes a larger share of their budgets. Economists frequently describe gasoline prices as regressive for this reason.
“It’s crazy. It’s not needed, especially at a time when people are already struggling,” said Mark Doran while filling up his vehicle in Middlebury, Vermont. “I don’t think there’s been an end in sight to any Middle East conflict that’s been started by us.”
Jerry Dalpiaz of Covington, Louisiana said he began filling up gas cans the day military operations against Iran were announced because he anticipated rising prices.
“I can weather the storm because I’m in good financial position,” Dalpiaz said. “But I feel sorry for my fellow citizens who are living paycheck to paycheck.”
War Damage Disrupts Energy Infrastructure
The broader conflict has also damaged key energy facilities across the region.
Iran has launched a series of retaliatory strikes targeting infrastructure tied to U.S. allies. One attack struck a major refinery in Saudi Arabia, while another hit a liquefied natural gas facility in Qatar. Those strikes temporarily halted flows of refined fuel and knocked out roughly 20 percent of global LNG supply.
Several countries in the region have reduced oil output as a precaution while fighting continues.
Kuwait announced Saturday that it would scale back production due to safety concerns.
Meanwhile, tankers attempting to move through the Strait of Hormuz have faced growing security threats, including drone attacks and possible mines in shipping lanes.
Amy Jaffe, director of the Energy, Climate Justice and Sustainability Lab at New York University, said the shipping industry remains deeply concerned about escalating security risks.
“The problem is that in the oil trading and oil shipping world, people are worried about counterterrorism,” Jaffe said.
She said threats range from armed drones and explosive boats to mines placed in shipping channels.
Until those security concerns are resolved, many shipping companies may remain hesitant to move cargo through the region.
Analysts Warn Conflict Could Last Longer Than Expected
Trump said earlier this week that U.S. military operations against Iran could last four to five weeks, but he emphasized that American forces have the capability to continue much longer if necessary.
He also indicated that negotiations with Iran are unlikely unless Tehran agrees to what he called “unconditional surrender.”
Energy analysts say the uncertainty surrounding the war’s timeline is fueling volatility in oil markets.
“The more news we get, the more it seems like this is going to last a really long time,” said Al Salazar, head of macro oil and gas research at Enverus.
Even if the Strait of Hormuz reopens fully, restoring confidence in global shipping could take time.
Salazar said the underlying risk remains that the route could remain vulnerable even after fighting subsides.
“All it takes is one individual with a RPG standing on the shore to take out a tanker,” he said. “And this is forever.”
