The White House said it was “in continuous coordination with relevant agencies on this important matter.”
“President Trump and his entire energy team had a strong game plan to stabilize energy markets before the start of Operation Epic Fury, and they will continue to review all credible options,” White House spokesman Taylor Rogers said.
Without sharing details of the plan, he said, “As the president said last night, this is a short-term change in oil prices, which will drop dramatically once Iran achieves its war goals.”
A US official told NBC News separately that Trump is examining several options to lower prices, including restricting US exports, intervening in the futures market and removing some requirements of the Jones Act that require domestic fuel to be carried only on US-flagged ships.
Fatih Birol, executive director of the International Energy Agency, attended the meeting, where he “updated ministers on the state of energy markets, which have deteriorated in recent days,” he said.
“In addition to shipping challenges through the Strait of Hormuz, substantial oil production has been curtailed,” Birol said in a statement. “This is creating significant and growing risks for the market.”
European Union Economy Commissioner Valdis Dombrovskis said late Monday that European ministers did not have an agreement to release the stockpiles, but that they would continue to evaluate the situation.
“One of the options being considered … is the release of oil reserves to provide more oil supply during this disruption,” he told reporters earlier in Brussels.
Storage question
Several countries, including Kuwait, the United Arab Emirates and Saudi Arabia, have cut oil production since the war began. Aramco, Saudi Arabia’s state-run oil company, did not respond to requests for comment.
The Strait of Hormuz, through which more than 20% of the world’s daily oil demand flows, is essentially closed to tankers. Ships near the strait south of Iran have reported receiving threats via radio transmissions. The British Maritime Trade Organization has reported many attacks on or near ships in the region.
Storage in this area is beginning to reach its capacity.
“With export bottlenecks unresolved and inventories continuing to tighten, further acceleration in regional supply cuts is likely in the coming days,” commodities analysts at JPMorgan Chase wrote on Friday.
“By next Friday, we estimate that 4 (million barrels per day) production will need to be cut.” Already, about 2 million barrels per day have been cut, he said.
So far, no country has completely shut down oil production, but analysts warn it could be next.
“If producers beyond Iraq and Kuwait are forced to curtail production, the ability to quickly restore pre-crisis supply will be more constrained,” analysts at Societe Generale said in a note to clients Monday morning. “Timing is therefore critical: the longer disruptions continue, the greater the likelihood that initially temporary outages will evolve into more durable supply losses.”
“The UAE is the next producer at risk of shutting down production in the next five to seven days,” he wrote. “Qatar is also weak.”
All four of those countries rank among the top five oil-producing countries in OPEC. Iran is also in the top five, but given US sanctions, most of its oil will end up in China.
According to multiple reports, Bessant and Chinese Vice Premier He Lifeng plan to meet this week.
