Trump Says Oil Reserves Would Run Out in 4 Weeks Without Iran Deal, Risking ‘Bedlam’
President Trump warned Wednesday that oil supplies could have been exhausted within a matter of weeks if the Strait of Hormuz had remained closed, arguing that the newly reached agreement with Iran prevented what could have become a global energy catastrophe.
Speaking in France during the Group of Seven summit, Trump emphasized the importance of restoring maritime traffic through the strategically vital waterway, saying the world was facing a looming shortage of available oil.
“We run out of reserves at about four weeks,” Trump said while discussing the memorandum of understanding reached with Iran. “You know, there are reserves all over the world, and we would really run out, and there’ll be a time when you wouldn’t be able to get it.”
Trump painted a dire picture of what could have happened had oil supplies continued to tighten, warning that widespread disruption would have followed.
He said it would be “bedlam” if the oil ran out.
Defending the agreement with Tehran, Trump argued that reopening the shipping lane was essential to stabilizing energy markets and ensuring the continued flow of crude oil around the globe.
“What this does is it allows the ships to go,” he said of the Iran deal. “If we keep bombing, those ships won’t be going.”
It was not immediately clear whether the president’s remarks referred specifically to American petroleum reserves or to worldwide oil stockpiles. White House officials declined to provide additional clarification, directing inquiries back to Trump’s public comments.
Concerns about shrinking inventories have been growing in recent weeks. The International Energy Agency, which represents many of the world’s major oil-consuming nations, has repeatedly cautioned that reserves have been declining as the conflict disrupted supplies.
Last month, IEA Executive Director Fatih Birol said emergency reserve releases had helped maintain market stability, while warning that those stockpiles could not support demand indefinitely.
At the time, Birol suggested that the closure of the Strait of Hormuz and the ongoing conflict had reduced available commercial inventories to only a few weeks’ worth of supply.
The agency also issued projections in May indicating that global oil consumption was expected to outpace production during the current year.
When the war began, the United States joined other IEA member nations in announcing coordinated releases from strategic petroleum reserves in an effort to offset supply disruptions. Combined, those measures added roughly 400 million barrels of oil to global markets.
As part of that effort, the Trump administration committed to releasing 172 million barrels from the U.S. Strategic Petroleum Reserve over a period of 120 days.
At the time of the announcement, America’s reserve contained approximately 415 million barrels. A release of 172 million barrels would ultimately reduce that total to roughly 243 million barrels, barring any additional purchases or withdrawals.
New figures released this week show the Strategic Petroleum Reserve has fallen to approximately 340 million barrels, its lowest level since 1983.
Before the conflict erupted, nearly 20 percent of the world’s oil consumption passed through the Strait of Hormuz. Its closure triggered sharp increases in oil prices over recent months, a surge that also translated into higher gasoline costs for consumers around the world.
{Matzav.com}
