Within a few hours, an "180-degree turn"! The U.S. shifted from "opposition" to "promoting" the largest strategic oil reserve release in history, driven by Trump's concerns

The Trump administration completed a policy U-turn within hours that stunned allies, shifting from opposition to actively pushing for the International Energy Agency (IEA) to release the largest emergency oil reserves ever—400 million barrels, more than twice the previous largest release.

On March 11, according to The Wall Street Journal, on Tuesday morning, U.S. Energy Secretary Chris Wright clearly stated at the G7 meeting that “large-scale market intervention is premature”; less than two hours later, the U.S. position suddenly reversed, and it began actively lobbying allies to support this unprecedented action.

The report noted that a senior White House official revealed that this “180-degree turn” was entirely due to a change in Trump himself—after being persuaded by advisors, he believed action was necessary to curb oil price volatility, prompting Wright to push for market intervention. This rapid shift reflects the high instability in decision-making during the Iran conflict period under the Trump administration.

However, market skepticism remains about the effectiveness of this “largest-ever” intervention—400 million barrels is only about 20 days of transit through the Strait of Hormuz, and oil prices still rose more than 5% on Wednesday.

From “Oppose” to “Promote”: Policy U-turn within hours

According to sources cited by The Wall Street Journal, on Tuesday morning, Chris Wright conveyed the White House’s stance at the G7 energy ministers’ meeting: since oil prices had recently fallen below $90 per barrel, large-scale market intervention was “premature.” This reflected Trump’s genuine thinking at the time.

However, less than two hours later, U.S. officials completely reversed their stance, pressuring allies to push for a large-scale oil release.

European officials were shocked by this sudden change but ultimately went along with it. The 32 IEA member countries then agreed to this largest-ever emergency oil reserve release, even breaking the agency’s usual 48-hour review period for member approval to make a quick decision.

U.S. officials revealed that the core driver behind this release was deep concern over the Strait of Hormuz being blocked. This vital Persian Gulf waterway supplies about one-fifth of the world’s oil; a prolonged closure would severely impact global energy markets.

Iran had repeatedly threatened to block the Strait if attacked by the U.S., even before the U.S. launched bombing operations on February 28. However, according to The Wall Street Journal, U.S. officials, in their hurried response to this economic shock, neither laid the diplomatic groundwork in advance nor informed key allies beforehand.

Employ America policy director Arnab Datta sharply criticized:

“The fundamental shock is that there was no preparation for the consequences of this war on the energy markets. Nothing was prepared, absolutely nothing.”

White House Press Secretary Karoline Leavitt defended the decision:

“President Trump previously stated he would responsibly use the Strategic Petroleum Reserve when appropriate, and now is the time.”

Largest-ever release: Can oil prices stay above $100?

The IEA-coordinated release totals 400 million barrels, far exceeding the 182 million barrels released after the Russia-Ukraine conflict in 2022. The U.S. will bear the largest share, exceeding 100 million barrels.

According to reports, sources said that if all these barrels are released into the market, the U.S. Strategic Petroleum Reserve would fall below half, reaching its lowest level since at least 2008—while Trump had promised during his inauguration to “fill the reserve to the top,” which is now only at 60%.

Regarding distribution among other member countries, a European energy minister revealed that Japan will release 30.5 million barrels, Canada 23.6 million barrels, and Germany 19.5 million barrels; French officials said France will contribute 14.5 million barrels, with the remaining 32 IEA members contributing smaller amounts.

Notably, some member countries were not enthusiastic about participating. Major European nations like Germany initially expressed reservations, believing that with the Strait still under blockade, large-scale intervention would have limited effect on lowering prices.

Germany’s energy minister Katherina Reiche’s statement was quite nuanced—she announced Germany’s participation but still questioned the intervention’s effectiveness: “We are still far from $110 per barrel, and the market seems to be responding actively.”

Additionally, according to The Wall Street Journal, a chief executive of a major U.S. investment bank even warned a European minister that using “maximum firepower” so early could backfire, signaling to the market that Trump is losing confidence. But ultimately, governments abandoned resistance to avoid larger market turmoil from public disagreements.

Despite the unprecedented scale, market skepticism remains about whether this intervention can effectively suppress oil prices. On Wednesday, oil prices rose over 5%, most of the gains occurring after The Wall Street Journal disclosed details of the IEA intervention plan.

Capital Economics London economist Hamad Hussain noted: “The speed at which IEA member countries can supply emergency barrels cannot compensate for Middle Eastern supply losses, even if hostilities end quickly.”

Analysts believe that 400 million barrels is only about 20 days of transit through the Strait of Hormuz, raising doubts about its ability to keep oil prices below $100 per barrel.

Risk warnings and disclaimers

Market risks exist; investments should be cautious. This article does not constitute personal investment advice and does not consider individual users’ specific investment goals, financial situations, or needs. Users should consider whether any opinions, views, or conclusions in this article are suitable for their particular circumstances. Invest at your own risk.