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U.S. releases strategic oil amid Strait of Hormuz disruption; official says swaps will replenish reserves
Summary
DOE Secretary Wright said the United States has begun releasing oil from strategic stocks after disruptions in the Strait of Hormuz pushed prices higher, estimating U.S. flow rates of about 1.0–1.5 million barrels per day and describing swap contracts that will return more than 1.2 barrels for every barrel released next year.
Secretary Wright told moderators that the United States and other IEA members have begun coordinated releases from strategic petroleum stocks in response to disruptions in the Strait of Hormuz that have tightened global energy flows.
"Prices went up to send signals to everyone that can produce more, please produce more," Secretary Wright said, describing the market response and steps taken to move cargoes waiting to unload in Asia into alternate ports and refineries.
He said U.S. oil from government stocks "started flowing last Friday afternoon," and rejected press suggestions the process required weeks to begin. On expected volumes, an onstage estimate placed the U.S. withdrawal rate between 1.0 and 1.5 million barrels per day, with possibly close to three million barrels released in total across participating nations.
Beyond immediate releases, Secretary Wright emphasized the current operation uses swap contracts rather than permanent sales. "For every barrel we release, we're going to get back more than 1.2 barrels of oil that'll go back into the reserve next year," he said, adding that the swap approach should leave the Strategic Petroleum Reserve with meaningfully more oil at the end of the program than it holds today.
The secretary described the releases as a temporary, market-stabilizing measure: "These are mitigants of a temporary situation," he said, adding that prices had not yet risen enough to drive broad demand destruction. He also noted that some nations lack strategic stocks and will move more slowly in coordinated draws.
There was no formal vote or regulatory action announced at the briefing; the moves described were executive coordination with the International Energy Agency framework and contractual swap arrangements to replenish U.S. stocks next year.
