Oil prices soar! The White House is finally taking action: will introduce phased measures to ease rising energy costs

Caixin News, March 3 (Editor: Xiaoxiang) Facing the surge in oil prices due to Middle East conflict, the White House seems finally unable to hold back…

U.S. Secretary of State Mike Pompeo stated on Monday that the U.S. will take action to mitigate the rise in energy prices caused by the Iran conflict and the resulting spike in oil prices.

While speaking to reporters on Capitol Hill, Pompeo said that U.S. Treasury Secretary Janet Yellen and Energy Secretary Jennifer Granholm will announce related plans on Tuesday.

“Starting tomorrow (Tuesday), you will see us gradually roll out these phased measures to address the issue… We anticipate this could become a problem,” Pompeo said.

On Monday, oil and natural gas prices surged after Israel and the U.S. launched strikes against Iran, and Tehran responded with retaliatory actions. These attacks forced the shutdown of oil and gas facilities across the Middle East and disrupted shipping through the critical Strait of Hormuz.

(Brent crude oil trend) However, according to sources familiar with the matter, the Trump administration currently has no plans to utilize the Strategic Petroleum Reserve to address the surge in crude oil and gasoline prices caused by the Iran conflict.

White House Press Secretary Karoline Leavitt stated in a release, “The Trump administration’s policies have driven U.S. crude oil production to record highs, and new market agreements, including those with Venezuela, will further increase supply. The Department of Energy and the Treasury will continue to monitor oil market dynamics and do their best to maintain price stability.”

Analysts point out that if the U.S. government ultimately uses the Department of Energy’s Strategic Petroleum Reserve, it could help curb price peaks and provide at least temporary relief. The reserve currently holds about 415 million barrels of crude oil, slightly more than half of its total capacity of approximately 700 million barrels. Any release of oil from the strategic reserve may be coordinated with International Energy Agency (IEA) member countries.

Nevertheless, ClearView Energy Partners noted in a report that if a “full-scale crisis” occurs in the Strait of Hormuz, its ongoing impact could exceed the support limits of the emergency oil reserves held by the U.S. and other IEA member countries.

Former U.S. President Donald Trump had previously vowed to replenish the oil reserves established after the 1970s Arab oil embargo, after his predecessor Biden’s administration repeatedly used the reserve, including releasing a record 180 million barrels of crude in 2022 following the Russia-Ukraine conflict to lower gasoline prices.