U.S. Energy Secretary also joins to "cool down" the oil market: discussing coordinated release of strategic petroleum reserves!

Caixin News, March 10 (Editor: Huang Junzhi) According to CCTV News, U.S. Energy Secretary Chris Wright stated on Monday that the U.S. government is “discussing” coordinating the release of strategic petroleum reserves to address the current energy market situation.

Wright also said that the U.S. has “other options” regarding the sale of Russian oil still stranded on tankers in Asian waters. For example, late last week, Washington issued a 30-day exemption allowing continued sales of Russian crude oil currently stranded at sea to India.

“We are discussing coordinating the release of strategic petroleum reserves,” Wright told reporters at a natural gas plant in Colorado. According to him, the U.S. Strategic Petroleum Reserve is located along the coasts of Texas and Louisiana, holding 415 million barrels of oil, more than the world’s four-day oil consumption.

The Strategic Petroleum Reserve is usually released in coordination by the International Energy Agency (IEA). IEA Director Fatih Birol said on Monday that the situation in the Strait of Hormuz poses a “significant and increasing risk” to the oil market.

He told G7 finance ministers that the group’s member countries have over 1.2 billion barrels of public emergency oil reserves, in addition to 600 million barrels of industrial reserves managed by the government.

Historically, coordinated releases of strategic reserves have only occurred five times, two of which were during the Russia-Ukraine war. Before that, reserves were used during Libya supply disruptions, Hurricane Katrina, and the First Gulf War.

The G7 agreed to closely monitor energy market developments but has not announced any release plans yet. EU Commission Economic Affairs Commissioner Donbrovskis said at a press conference that it is too early to discuss specific policy measures regarding the Middle East situation. He also stated that preparations have been made to take necessary measures, including the possible use of strategic petroleum reserves.

Additionally, Wright said that there are no current plans to lower oil prices by banning oil exports.

On that day, international oil prices experienced a rollercoaster. During Monday’s Asian trading session, Brent crude oil surged by 30%, reaching about $120 per barrel. Later, after U.S. President Trump said the war might end soon, international oil prices plummeted, with Brent futures dropping 9% to around $84 per barrel. As of the time of writing, prices have rebounded to around $93.

“I think this war is basically over, more or less. They no longer have a navy, no communication systems, and no air force. Their missiles have been shot down in bits and pieces. Their drones have been destroyed everywhere, including drone manufacturing facilities,” Trump said.