Trump Runs Out of Oil Levers as Crude Nears $100 After Houthi Attack
Updated
Updated · Fortune · Jul 25
Trump Runs Out of Oil Levers as Crude Nears $100 After Houthi Attack
3 articles · Updated · Fortune · Jul 25
Summary
$100 oil is back in view after Houthi fighters fired on two Saudi tankers in the Bab el-Mandeb, reviving fears that Red Sea disruption could combine with pressure on the Strait of Hormuz.
Trump has few market tools left: emergency reserves are already heavily drawn down, U.S. producers and refiners are near peak output, the Jones Act has been waived, and a gas-tax holiday would need congressional approval.
The Strategic Petroleum Reserve has fallen to 311 million barrels from more than 726 million at its 2009 peak, with up to 172 million more barrels already authorized for release and analysts warning usable cushion is running thin.
Analysts say that leaves Trump facing a stark choice between escalating militarily or effectively accepting Iranian control and tolling of Hormuz; if both chokepoints are constrained, crude could revisit April's $124 high in August.
U.S. gasoline already tops $4.10 a gallon, and triple-digit crude is seen as a political and psychological threshold that could intensify pressure ahead of the November midterm elections.