News Desk, The Cradle.
President Trump said US consumers should not complain about ‘paying more’ for gasoline due to his war on Iran.
US oil reserves have fallen to the lowest level in 40 years, raising fears that the underground caverns holding them could be permanently damaged as Washington struggles to manage the fallout of its ongoing war on Iran.
Data released last week by the Department of Energy showed that the Strategic Petroleum Reserves (SPR) will fall to roughly 243 million barrels of oil after the current release of 172 million barrels is completed.
Before the Russia-Ukraine war in 2022, the SPR held about 582 million barrels of crude oil.
According to market analysts at Rapidan Energy, the fall of the SPR below 170 million barrels will cause damage to “cavern integrity and pumping infrastructure.”
To extract oil from the caverns, fresh water is pumped into the bottom of the cavern to force oil up to pipeline intakes.
President Donald Trump authorized the massive drawdown of the reserves, which are held in 60 underground salt caverns across four sites in Texas and Louisiana, to keep oil prices low amid the closure of the Strait of Hormuz.
Iran closed the strait to exports of Gulf oil in response to the start of the US-Israeli war on the Islamic Republic in February, causing world oil prices to spike from roughly $70 per barrel to $170 per barrel in some markets.
Nearly six months later, the Strait of Hormuz remains closed, while high gas prices in the US threaten to damage Trump’s Republican Party in the October mid-term elections.
The AAA National Average for a gallon of regular gasoline has now reached $4.07, the highest price on record for mid-August.
In a speech on Friday, Trump said US consumers should not complain if they have to pay more for gasoline.
“When you have to pay a little bit more, you’re at $4, it’s OK, I mean, it’s not. I’ll never apologize. I did the right thing,” he added.
Higher gas prices in the US and across the world have been coupled with rising food prices since the start of the war, harming people in poorer countries especially hard.
The Department of Energy rejected claims that the caverns are at risk of damage, saying that a reserve of only 70 million barrels of oil must be maintained.
“The caverns are always full. All that changes is the ratio of oil and water that is filling them,” Energy Department spokesman Ben Dietderich said. President Trump is “responsibly managing the SPR as the critical national security asset it was designed to be,” he claimed.
Amos Hochstein, a senior energy advisor to President Joe Biden, questioned the Energy Department claims.
“Don’t believe the people out of the government that are saying the SPR can go to 70 million barrels. It’s nonsense,” Hochstein told CNBC on Thursday. At such a low level, the reserve would be depleted to “the point of never resurrecting it,” he said.
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