Desperation, thy name is Scott Bessent

Alphaville Strategic Petroleum Reserve USAAdd to myFTGet instant alerts for this topicManage your delivery channels hereRemove from myFTCould the US really release more of its strategic oil reserves?Desperation, thy name is Scott Bessent© ReutersCould the US really release more of its strategic oil reserves? on x (opens in a new window)Could the US really release more of its strategic oil reserves? on facebook (opens in a new window)Could the US really release more of its strategic oil reserves? on linkedin (opens in a new window)Could the US really release more of its strategic oil reserves? on whatsapp (opens in a new window) Save Could the US really release more of its strategic oil reserves? on x (opens in a new window)Could the US really release more of its strategic oil reserves? on facebook (opens in a new window)Could the US really release more of its strategic oil reserves? on linkedin (opens in a new window)Could the US really release more of its strategic oil reserves? on whatsapp (opens in a new window) Save Robin WigglesworthPublishedMarch 20 2026Jump to comments sectionPrint this pageUnlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The Trump administration, which definitely carefully planned its war on Iran and thought through all the potential implications, seems to be getting increasingly worried about the completely unforeseeable rise in gas prices.After all, pump prices are now approaching the $4 a gallon level that many Americans consider a naked affront to all that is holy and good in the world. We’ve seen various desperate measures to tame the rise, like suspending the Jones Act, easing sanctions on Russian and possibly even accepting Iranian oil. The last might be the most eye-catching, given the incoherence of bombing a country while making it easier for it to export its main financial lifeline. But this may be the most desperate:Bessent . . . also pointed to a 400 million-barrel coordinated Strategic Petroleum Reserve release approved last week and said the U.S. could act again unilaterally if needed.“The largest coordinated SPR release in history, 400 million barrels, was approved last week,” he said. “The U.S. could unilaterally do another SPR release to keep the price down.”The US Strategic Oil Reserve is a series of vast, subterranean salt caverns in four different sites in Louisiana and Texas, and was first set up after the 1973-74 Arab oil embargo. Many are enormous — the average cavern holds about 10mn barrels, about as much as five Very Large Crude Carrier tankers — and one is big enough to fit Chicago’s Willis Tower. This clever network of tunnels, grottos, pumps and wells can in total hold about 715mn barrels of oil, or enough to supply the entire US with all the oil it needs for over a month (at least going by 2023 consumption).Unfortunately, there was only 155mn barrels of sweet oil and 261mn barrels of sour oil as of March 13, according to the SRP’s own website. That’s because president Joe Biden ordered the release of 180mn barrels in 2022 after Russia’s invasion of Ukraine caused energy markets to go haywire, and the US has since been slow to replenish it. The Trump administration has already said it will release 172mn barrels as part of a wider, record-breaking 400mn international release. But, once complete, this will bring the SPR’s holdings down to 244mn barrels — and the government is actually barred by law from drawing down inventories if there’s less than 252mn barrels in the salt caverns.The US could of course declare an emergency — though that’s supposed to mean a real crisis of acute energy shortages, not pricier gas ahead of mid-term elections — or get Congress to change the law. But there’s another hard limit that is a lot harder to bully into submission: physics. The SPR’s salt cavern system wasn’t designed to operate like an everlasting oil piggy-bank you can easily draw down and fill up whenever you want. As Bloomberg has previously reported:The Gulf Coast salt caverns that comprise the 70s-era reserve were built with a 25-year life span in mind. They were designed for just five drawdowns and refills, said William “Hoot” Gibson, the reserve’s former project manager. The more the system is used, the higher the risk the salt caverns will dissolve.By Alphaville’s count, this is already the ninth drawdown (emergency or otherwise) since the SPR’s inception in 1977. There’s therefore apparently a minimum level of oil that must be kept in the salt caverns to prevent a catastrophic structural damage. We haven’t been able to find out definitively what this level is (even after scanning some of the recent SPR reports to Congress), but JPMorgan’s energy analysts said last week that it was about 150 million barrels, beyond which dangerous things could happen. . . . The SPR has a practical operational floor near 150–160 mb that must remain in place to preserve cavern stability and maintain operational flexibility, including a small portion of “roof oil” that cannot be withdrawn.So sure, yes, maybe the US government can release more oil from the SPR, beyond the 172mn barrels it has already announced. But not as much as it has already promised, and heading towards the lower operational limit would probably spark fear more than anything else. Desperation tends to do that. Reuse this content (opens in new window) CommentsJump to comments section Follow the topics in this article Oil Add to myFT Energy sector Add to myFT Strategic Petroleum Reserve USA Add to myFT Alphaville Add to myFT Robin Wigglesworth Add to myFT Comments