Latest news with #SPR
Newsweek
2 days ago
- Business
- Newsweek
White House: No Imminent Plans for Refilling Strategic Petroleum Reserves
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. The Trump administration has no imminent plans to replenish the country's Strategic Petroleum Reserve (SPR), White House Press Secretary Karoline Leavitt told reporters during Thursday's briefing. The SPR stands at its lowest level since the 1980s after significant releases under President Joe Biden, and the price of crude oil is hovering between $65 and $70 a barrel after dropping by an average of $10 a barrel earlier this week. Why It Matters The decision not to refill the emergency reserve is significant for U.S. consumers and energy security. The SPR's depleted status limits the government's ability to intervene during supply shocks or price spikes, potentially leaving American families and industries more exposed to global oil market volatility. The administration's focus on domestic production aims to reduce reliance on international supply but raises questions about preparedness for unforeseen crises. In an aerial view, the LyondellBasell Houston refinery is seen at sunset on June 18, 2025 in Houston, Texas.) In an aerial view, the LyondellBasell Houston refinery is seen at sunset on June 18, 2025 in Houston, Texas.)What To Know Oil prices for crude are hovering between $65 and $70 a barrel after prices dropped by an average of $10 a barrel earlier this week. When asked by reporters if this would prompt the administration to try and refill the strategic reserves, Leavitt said she was not aware of any "imminent plans" to do so. Instead, she said the administration would continue with its plans to tap into the nation's natural resources, continuing its slant towards more domestic output as a means of self-sufficiency. "This president and our Department of Energy have tapped into our resources here," Leavitt said. Oil prices have remained largely stable over the past six months at around the mid-to-high $60 a barrel for various crude oils. Some feared that the U.S. strikes in Iran and the war between Iran and Israel might cause prices to jump. Initially, oil rose by about $10 a barrel, but then the price returned to its previous norm. The price of oil was nearly $20 more per barrel at the same time last year, with Brent Crude priced at $86.24 a barrel, WTI Crude priced at $82.81 a barrel, and Murban Crude at $87.44 a barrel. The United States' Strategic Petroleum Reserve reached its lowest inventory since the 1980s in July 2023, with a little under 347.5 million barrels under the Biden administration. Biden replenished some of those losses and left around 393.5 million barrels in the SPR. The Trump administration has added around 3000 barrels to that reserve by March 2025. The reserve hit its peak in 2011 with around 726.5 million barrels, when the authorized capacity was at 727 million. The diminished reserve is a direct result of drawdowns initiated by the Biden administration in a bid to soften consumer fuel prices during previous market volatility, according to Reuters. What People Are Saying Karoline Leavitt, White House spokeswoman, stated: "There's no imminent plans to do that from what I understand, but as you have seen with the plummeting of oil prices in this country, it's because this president and our department of energy have tapped really into our resources here and we have an increase in supply." What Happens Next The Trump administration indicated it would continue relying on expanded domestic energy production to address market demands and has not provided a timeline for when or if the Strategic Petroleum Reserve would be replenished.
AllAfrica
5 days ago
- Business
- AllAfrica
A Strait of Hormuz blockade would barely hurt the US
The Strait of Hormuz has long stood as a symbol of global energy vulnerability. Stretching barely 39 kilometers at its narrowest point between Iran and Oman, it funnels nearly 20% of the world's oil supply and over one-third of liquefied natural gas. Any threat of its closure—whether rhetorical or real—inevitably triggers alarms across energy markets. Yet beneath the headlines and hyperbole lies a strategic paradox: closing the Strait of Hormuz would not deal a decisive economic blow to the United States. In fact, the economic and geopolitical recalibration underway since the US shale revolution suggests that Washington is less exposed than its adversaries and even some of its allies. Since the early 2010s, the United States has pursued a pathway toward energy self-reliance. The shale boom transformed the US from a net importer into one of the world's top oil producers. According to the US Energy Information Administration (EIA), less than 10% of its crude imports now come from the Persian Gulf. Moreover, the US has fortified itself with a Strategic Petroleum Reserve (SPR) capable of dampening supply shocks during times of geopolitical crisis. Though partially drawn down during the Ukraine and Gaza crises, the SPR remains a vital economic shield. This structural shift has dramatically reduced America's vulnerability to turmoil in the Gulf. In contrast to the 1970s oil shocks, when OPEC's embargo inflicted widespread inflation and recession, today's US economy is not tethered to the Strait of Hormuz. Energy independence has become a cornerstone of US strategic confidence, especially under the Trump administration's renewed emphasis on resource nationalism and transactional diplomacy. But the implications go deeper. For President Donald Trump and his circle of foreign policy strategists, any regional escalation in the Gulf—whether through Iranian retaliation or Israeli provocation—can be leveraged as a controlled escalation. When the US and Israel launched airstrikes on Iran's Fordow, Natanz and Isfahan nuclear sites in June 2025, the anticipation of Iranian closure of the strait was likely already priced in—not only by markets but by decision-makers. Ironically, such a disruption strengthens Washington's geopolitical hand. US naval dominance, particularly through the Fifth Fleet stationed in Bahrain, allows it to present itself once more as the guardian of maritime freedom. This plays well with allies such as Japan, South Korea and India, who depend heavily on Gulf energy. These countries, in turn, may deepen security alignments with Washington, reinforcing the hub-and-spokes model that underpins US regional primacy. In the meantime, American LNG producers could benefit. With Gulf LNG supplies constrained and threatened, US exports from terminals in Louisiana and Texas become more competitive, especially in European and East Asian markets. This is not just a security story—it is an economic windfall for key US constituencies in energy-rich states. Critically, one must distinguish between temporary inflationary pressures and systemic economic collapse. Yes, a Hormuz closure could push up global oil prices, and yes, US consumers may feel the pinch at the pump. But the broader US economy—now driven more by services, digital innovation and financial capital than by fossil fuel dependencies—can absorb these shocks. The US Federal Reserve, equipped with monetary tools and real-time data analytics, has repeatedly shown agility in stabilizing inflationary expectations. If economic pain is not evenly distributed, who then suffers most? The answer lies eastward. China, the world's largest energy importer, relies on Gulf oil to sustain its industrial output and urban development. Despite efforts to diversify sources—from Russia to Central Asia—Beijing remains structurally dependent on maritime routes that it does not militarily control. Iran's threats to blockade the Strait of Hormuz put China in a strategic bind: its top oil supplier (Iran) is also its potential liability and its maritime vulnerability remains unresolved. India, too, finds itself exposed. With over 80% of its oil imported, a significant portion of which passes through the Gulf, any prolonged disruption could spike inflation and slow economic growth. Japan and South Korea face similar risks. Lacking domestic energy resources and deeply reliant on maritime supply chains, both East Asian powers watch Gulf tensions with unease. Yet unlike the US, they lack either the military reach or economic fallback mechanisms to influence outcomes. Within Southeast Asia, the impact is nuanced but concerning. Association of Southeast Asian (ASEAN) economies, such as Malaysia, Thailand and the Philippines, rely on Middle Eastern oil to varying degrees. Energy price volatility would exacerbate fiscal pressures, especially in economies already facing post-pandemic debt burdens. However, ASEAN has begun to recalibrate its strategic posture. Under the current ASEAN chairmanship of Malaysia and Prime Minister Anwar Ibrahim's leadership, the bloc has prioritized energy diversification and regional cooperation. Malaysia and Indonesia are expanding refining capacity and investing in LNG infrastructure. Thailand and Vietnam are integrating solar power into regional grids. Rather than being reactive, ASEAN's long-term recalibration reflects its quiet adaptability to global disruptions and refusal to be trapped in binary choices between great powers. This recalibration is not only economic—it is also diplomatic. ASEAN's recent engagement with both the Gulf Cooperation Council (GCC) and China in trilateral forums reflects a conscious effort to de-escalate tensions through dialogue. The ASEAN-GCC-China Summit and Track 1.5 diplomacy provide a platform for coordinated responses that preserve economic stability without defaulting to militarization. Still, the US finds itself in an interesting contradiction. While it may not be economically crippled by the closure of Hormuz, its longer-term challenge lies in managing the unpredictability of its own military responses. The use of the Massive Ordnance Penetrator (MOP)—designed originally for North Korean bunkers—in Iranian terrain poses strategic risks. The efficacy of such strikes remains uncertain, as the geological structures and subterranean complexity of Iranian nuclear sites are not easily neutralized. Moreover, Iran's calibrated retaliation, including its pre-notified missile strike on the Al Udeid Air Base in Qatar, shows that Tehran seeks to balance deterrence with diplomatic signaling. This ambiguity is a calculated move not just toward Washington, but also toward Beijing and wider Asia. Iran does not want to be isolated, even while responding to aggression. In sum, the closure of the Strait of Hormuz is not the economic Achilles' heel of the United States that it once was. Thanks to energy independence, strategic reserves, diversified economic sectors and global alliances, Washington can absorb the shock. For others—especially in Asia—the costs are higher and the tools for mitigation fewer. Phar Kim Beng, PhD, is professor of ASEAN studies, International Islamic University Malaysia . Luthfy Hamzah is senior research fellow, Strategic Pan Indo Pacific Arena, Kuala Lumpur
Economic Times
5 days ago
- Business
- Economic Times
Oil markets hold firm amid West Asia tensions
Oil markets initially reacted with jitters but stabilized as traders assessed that escalating tensions in West Asia are unlikely to disrupt supplies, especially with a low probability of Iran blocking the Strait of Hormuz. Despite the US joining the conflict and Iran's parliament considering closing the strait, analysts believe retaliation is limited. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Contrary to fears, oil markets remained calm on Monday after an initial bout of jitters, as traders bet that rising tensions in West Asia are unlikely to disrupt supplies, particularly given the low risk of Iran blocking the vital Strait of Hormuz Brent crude held steady at around $77.50 a barrel by Monday evening, roughly the same as Friday's level, but higher from about $69 a barrel prior to Israel's June 13 attack on the US joined the conflict over the weekend, fears of a wider regional war escalated, an industry executive said. "But it also became clearer that Iran would pay a heavy price if it tried to escalate the conflict or block oil trade, making such a move less likely," the executive Strait of Hormuz, a narrow channel between Oman and Iran, handles roughly 30% of global oil trade and 20% of LNG shipments. About 40% of India's crude imports and 54% of its LNG supply move through this route. Following the US strike on Sunday, the Iranian parliament approved a measure to close the strait. The Iranian top leadership will have to take a final call on this of economic sanctions, Israeli strikes on Iran and its proxies such as Hamas and Hezbollah, and the waning influence of Russia in the Middle East have limited Tehran's options for retaliation, industry executives addition, the US can draw from its large Strategic Petroleum Reserve (SPR) if needed, as it did after the outbreak of the Ukraine war. The US is now the world's largest crude producer, pumping roughly 13 million barrels per day - far ahead of Saudi Arabia and Russia, which each produce about 9 million barrels per Saudi Arabia and its OPEC+ allies have been adding crude supply since May, at a time when rising global uncertainties and a shift to electric vehicles in China have shrunk oil demand growth, putting downward pressure on have warned, however, that prices could rise sharply if the conflict threatens to curtail Iranian exports or disrupt wider regional supplies.
Time of India
6 days ago
- Business
- Time of India
Oil markets hold firm amid West Asia tensions
Oil markets initially reacted with jitters but stabilized as traders assessed that escalating tensions in West Asia are unlikely to disrupt supplies, especially with a low probability of Iran blocking the Strait of Hormuz. Despite the US joining the conflict and Iran's parliament considering closing the strait, analysts believe retaliation is limited. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Contrary to fears, oil markets remained calm on Monday after an initial bout of jitters, as traders bet that rising tensions in West Asia are unlikely to disrupt supplies, particularly given the low risk of Iran blocking the vital Strait of Hormuz Brent crude held steady at around $77.50 a barrel by Monday evening, roughly the same as Friday's level, but higher from about $69 a barrel prior to Israel's June 13 attack on the US joined the conflict over the weekend, fears of a wider regional war escalated, an industry executive said. "But it also became clearer that Iran would pay a heavy price if it tried to escalate the conflict or block oil trade, making such a move less likely," the executive Strait of Hormuz, a narrow channel between Oman and Iran, handles roughly 30% of global oil trade and 20% of LNG shipments. About 40% of India's crude imports and 54% of its LNG supply move through this route. Following the US strike on Sunday, the Iranian parliament approved a measure to close the strait. The Iranian top leadership will have to take a final call on this of economic sanctions, Israeli strikes on Iran and its proxies such as Hamas and Hezbollah, and the waning influence of Russia in the Middle East have limited Tehran's options for retaliation, industry executives addition, the US can draw from its large Strategic Petroleum Reserve (SPR) if needed, as it did after the outbreak of the Ukraine war. The US is now the world's largest crude producer, pumping roughly 13 million barrels per day - far ahead of Saudi Arabia and Russia, which each produce about 9 million barrels per Saudi Arabia and its OPEC+ allies have been adding crude supply since May, at a time when rising global uncertainties and a shift to electric vehicles in China have shrunk oil demand growth, putting downward pressure on have warned, however, that prices could rise sharply if the conflict threatens to curtail Iranian exports or disrupt wider regional supplies.
Economic Times
6 days ago
- Business
- Economic Times
West Asia tensions may choke LPG supplies
Live Events No Panic Buying from Refiners Staying vigilant (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel New Delhi: About two of every three liquefied petroleum gas (LPG) cylinders used in Indian homes for cooking come from West Asia, making households the first, and politically most sensitive, casualty if regional tensions disrupt supply lines, said industry American strikes on Iran's nuclear sites have heightened concerns about supplies from the world's most prolific oil-producing region getting choked. In planning for such scenarios, Indian policymakers and industry leaders have recognised that not all fuels carry the same risk, with LPG standing out as the most vulnerable if tensions in West Asia boil the past decade, LPG usage in India has more than doubled, reaching 330 million households, thanks largely to a government push to expand its adoption. This has increased the country's import dependence, with roughly 66% of its LPG sourced from overseas, and about 95% of that coming from West Asia, primarily Saudi Arabia, the UAE and has LPG storage capacity across import terminals, refineries and bottling plants sufficient to cover only about 16 days of national average consumption, according to petroleum and natural gas ministry the country is far better positioned with respect to petrol and diesel. As a net exporter of both, India ships out about 40% of its domestic petrol usage and about 30% of its diesel usage, making it simpler to redirect export volumes to the domestic market if LPG can be sourced from alternatives such as the US, Europe, Malaysia and parts of Africa, shipments from these suppliers would take longer to piped natural gas (PNG) is available to just 15 million households in India, making it an impractical substitute for the nation's 330 million LPG connections. After the phase-out of kerosene supply from the public distribution system in most places, electric cooking remains the only viable fallback in the event of an LPG shortage in crude oil, inventories at refineries, pipelines, ships and the national Strategic Petroleum Reserve (SPR) can sustain refinery operations for about 25 days. Refiners have refrained from panic buying amid the Israel-Iran conflict, confident that supplies are unlikely to be choked.'Even if we place orders now, deliveries wouldn't arrive until next month or later,' said an executive, who did not wish to be identified. 'Moreover, our spare capacity to store additional barrels is limited. It doesn't make sense to tie up working capital when the risk of disruption is low. What really matters is staying vigilant and ensuring domestic consumers are protected.'Executives also expect any crude price surge to be short-lived, as global market dynamics remain tilted towards softer pricing. 'The oil market has learned to live with geopolitical shocks. Prices rise sharply after events like the invasion of Ukraine or the Gaza conflict, but eventually settle down as economic realities take hold,' another executive oil prices may erode refiners' margins in the short term, but retail prices of petrol and diesel are unlikely to move, executives said. State-run oil marketing companies have kept pump prices unchanged for about three years and are expected to continue doing so despite fluctuations in global markets.
