WASHINGTON, March 11: The U.S. will release 172 million barrels of oil from its strategic petroleum reserve in a bid to reduce oil prices that have soared due to supply shocks from the U.S.-Israeli war on Iran, U.S. Energy Secretary Chris Wright said on Wednesday.
Wright said the release is part of a broader release of 400 million barrels of oil agreed to by the 32-nation International Energy Agency earlier in the day.
Wright said the release will begin next week and will take about 120 days to deliver.
The U.S. and Israel began attacks on Iran on February 28. Iran has responded with its own strikes on Israel and Gulf countries with U.S. bases.
Raising the stakes for the global economy, Iran’s Islamic Revolutionary Guard Corps said it would block oil shipments from the Gulf unless the U.S. and Israeli attacks cease. The war has shaken markets around the world.
When asked earlier on Wednesday whether he was looking at the threshold for the strategic petroleum reserve, President Donald Trump said Washington will “reduce it a little bit.”
“The United States has arranged to more than replace these strategic reserves with approximately 200 million barrels within the next year,” the U.S. energy secretary said in a statement.
The IEA, meanwhile, recommended the release of 400 million barrels of oil, the largest such move in its history, to try to rein in energy prices, which are now up more than 25% since the war began. The time frame for the release will be decided in due course, the IEA said.
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The proposed volume is more than double the 182 million barrels released in 2022 following Russia’s invasion of Ukraine, but analysts said it was ultimately insufficient to resolve supply losses from a prolonged war in the Middle East.
The proposed release is roughly equal to about four days of global production and 16 days of the volume of crude that transits through the Gulf, Macquarie analysts estimated.
“If that doesn’t sound like much, it isn’t,” the analysts said in a note.