The U.S. Strategic Oil Reserve (SPR) is at its lowest level in 40 years, containing 396.7 million barrels of crude oil after Biden exhausted it and Trump was unable to replenish it. This is when the Israeli-Iranian crisis arises and the possible closure of the Strait of Hormuz if the United States joins the crisis. In such a situation, 20% of daily global oil consumption could be stranded in the Persian Gulf, the price of crude oil could soar to $150 per barrel and the world could suffer a shortage of more than 17 million barrels of oil.
Trump’s previous bill requires the SPR to buy only 17.5 million barrels of oil (assuming prices of about $75 per barrel). With double that, the SPR would not even be able to afford half a day’s consumption in the United States (an average of 20 million), or it would not be able to operate without imports from the Gulf (600,000 barrels per day) for about two weeks. If the strait were closed, Trump’s dreams of reindustrialization fueled by cheap energy could become a nightmare, full of inflation and shrinking growth. It would be like it was during the Arab oil embargo of the 1970s. Europe’s already battered, import-dependent economy would collapse and could even sink into depression. China has accumulated 1.18 billion barrels of crude oil reserves, which will allow it to survive a possible crisis much better.
Translated and edited by Alex Kada