Final tranche of US commitment under IEA-coordinated release; energy secretary criticizes Europe for falling short

US President Donald Trump speaks in the Oval Office at the White House in Washington on Monday. [AP]
US President Donald Trump speaks in the Oval Office at the White House in Washington on Monday. [AP]

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The US government has decided to release up to 40 million barrels (6.36 billion liters) from its Strategic Petroleum Reserve amid surging oil prices. The release is part of a 400 million-barrel (63.6 billion-liter) commitment made in March by about 30 countries under coordination by the International Energy Agency following the outbreak of war with Iran, and represents the final tranche of the 172 million barrels (27.35 billion liters) the United States pledged.

According to Bloomberg, the deadline for submitting bids for this release is 11 a.m. Central Time on Tuesday.

Energy Secretary Chris Wright said "several European member states have released only a small fraction of the crude oil and petroleum products they committed to" and called on all member states to honor their pledges. Wright noted that the United States and Japan had fulfilled their commitments, expressing frustration with European nations.

EU Energy and Housing Commissioner Dan Jørgensen said Tuesday that the EU had discussed with IEA Executive Director Fatih Birol whether to release additional emergency oil reserves, but had not yet decided whether to urge member states to do so. "We need to have a conversation between member states and the IEA on these issues," he said.

He added that the EU must strike a balance between the need to ease the price surge and preserving emergency reserves against potentially more severe supply disruptions.

Jørgensen also said he had conveyed to Wright that a US ban on diesel exports would benefit no one, and that Wright did not support such a measure.

EU member states were responsible for roughly 20 percent of the total reserves earmarked for release under the IEA-coordinated plan. The EU has not disclosed the total amount its members have released so far.

However, the IEA has said that contributions from EU countries would come primarily in the form of refined petroleum products rather than crude oil.

President Trump and the Republican Party are feeling pressure from voters demanding lower fuel prices ahead of November's midterm elections.

The average price of gasoline in the United States currently stands at about $4.45 per gallon (3.785 liters), up nearly 50 percent since the war with Iran began in late February. Diesel prices have risen about 70 percent to a record $6.50 per gallon.

The sharp rise in diesel prices — a fuel essential to agriculture, freight transport and manufacturing — has become a significant political liability for the Trump administration and Republicans, particularly in rural states where the party holds strong support.

The Trump administration is pursuing several measures to bring down fuel prices, especially diesel, including encouraging foreign countries to release their own reserves, restricting US diesel exports, and working with refiners to boost domestic supply.

According to Reuters, US SPR stocks have fallen to below 284 million barrels, the lowest level since 1982.

The United States carried out two large-scale SPR releases in recent years: one under the Joe Biden administration following Russia's full-scale invasion of Ukraine in February 2022, and another this year under Trump's second term after the outbreak of the Iran war in February.

Under federal law, SPR releases are prohibited — except in emergencies — if stocks fall below 252.4 million barrels. The technical minimum needed to keep storage infrastructure operational is lower, however; Washington-based consultancy ClearView Energy Partners estimates it at around 70 million barrels.

US government SPR releases are conducted as loans: the government lends crude oil to companies selected through a bidding process and receives it back with a premium.

Repayment of the loaned crude is expected to be completed by the end of 2028, with premiums potentially reaching as high as 24 percent, Reuters reported.


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