It's Getting Harder to Curb High Oil Prices! Analysts Point Out: The U.S. Has Exhausted Most of Its Relief Measures

Last week, the United States used its strategic petroleum reserves in response to the International Energy Agency’s record-breaking oil release plan to address the global surge in oil prices caused by the US-Iran conflict.

In addition, the Trump administration issued a one-month waiver allowing buyers to purchase Russian oil transported by tankers without sanctions. Two weeks ago, the US also pledged to provide risk insurance and escort services for tankers to help pass through the Strait of Hormuz, which has effectively been closed.

However, these measures failed to curb the rise in international oil prices. Last week, Brent crude surged to $120 per barrel, then fell back to $80 per barrel before entering another upward trend, currently stabilizing around $100 per barrel. Analysts warn that if the Strait of Hormuz remains closed for an extended period, oil prices could rise further to $150 or even $200 per barrel.

This has also made the US quite anxious. Trump has repeatedly called on allies and other interested parties to form a joint fleet to help reopen the Strait of Hormuz, but so far, no responses have been received.

Some analysts warn that the US has essentially exhausted most of its emergency measures to curb soaring oil prices. This not only risks unpredictable upward price movements but could also significantly impact the US political landscape, making it difficult for the Republican Party to succeed in the midterm elections in November.

In Trouble

Energy expert Ron Bousso stated that Trump has few options left to control the worsening situation. Remaining measures to lower US oil prices include waiving the Jones Act, which allows non-US ships to transport cargo between US ports, or passing legislation in Congress to reduce federal taxes on gasoline and diesel.

However, these measures are only temporary fixes and cannot fundamentally repair the damage caused by the closure of the Strait of Hormuz. Each day the strait remains closed, nearly 17 million barrels of crude oil and petroleum products are stranded, creating a significant supply gap.

North Carolina State University economist Steve Aaron pointed out that the US releasing its oil reserves is merely a “weak adhesive bandage.”

Wood Mackenzie senior oil market analyst Andrew Harbourne further emphasized that alternative measures, such as Saudi Arabia rerouting through the Red Sea or UAE exporting oil from Fujeirah, can only restore about half of the flow of the Strait of Hormuz. The release of 400 million barrels of reserves is equivalent to roughly four times the flow of the Strait.

In this situation, Patrick De Haan, head of oil analysis at GasBuddy, believes that only restoring the flow through the Strait of Hormuz can fully resolve the oil price crisis. However, this depends on whether the US can quickly assemble a coalition to fully open the Strait.