Trump's 'head-spinning 180 degree turn' could drain US oil reserves to worrisome lows: WSJ

President Donald Trump's "head-spinning" reversal plan to release strategic oil reserves in response to his war against Iran could drain U.S. strategic oil reserves to levels not seen in nearly two decades, the Wall Street Journal reported on Thursday.

"According to the officials, U.S. Energy Secretary Chris Wright gave his counterparts in the Group of Seven nations the White House’s position Tuesday morning: A massive intervention in oil markets was premature because the price of oil had recently dipped below $90 a barrel," said the report. "Less than two hours later, U.S. officials reversed their earlier position and pushed their counterparts for a major release of oil, said people familiar with the matter. The 180 degree turn was entirely due to a change of heart by President Trump, said a senior administration official."

In response to this change, noted the report, "The 32 member nations of the International Energy Agency agreed to the largest release of emergency oil stocks in the group’s history, breaking with the international body’s own conventions, which typically give members 48 hours to review proposals. The amount, 400 million barrels, is more than double the previous release and comes at a time when the U.S. Strategic Petroleum Reserve is only 60% full — despite a pledge by Trump to fill it completely."

When former President Joe Biden made releases from the SPR to contain supply-shock related inflation, Republicans made it a massive issue, calling it an irresponsible use of the reserve, and Trump pledged at his second inauguration to fill the SPR "right to the top."

Now, however, Trump's plan could theoretically deplete the SPR by far more than that episode.

"The U.S. will supply the lion’s share of the release, more than 100 million of the 400 million barrels, according to people familiar with the matter," said the report. "U.S. reserves could be less than half full if the Trump administration ends up releasing all of that onto the market, the lowest level since at least 2008."

This comes at a moment when Trump's mixed signals about how long the Iran war will continue inject even further uncertainty.